Al Ansari IPO: UAE money exchange plans to sell 10% stake

Company is selling 750 million shares and expects to start trading on the Dubai Financial Market on April 6

An Al Ansari Exchange branch in Abu Dhabi. The company has 231 branches in the UAE. Delores Johnson / The National

Al Ansari Financial Services, the UAE money and exchange company, plans to list 10 per cent of the company in an initial public offering.

The company is selling 750 million shares with a nominal value of Dh0.01 and plans to list on the Dubai Financial Market, it said on Thursday.

The qualified investor subscription period will run from March 16 to March 24 while the UAE retail subscription period will take place from March 16 to March 23.

The company expects to start trading on the DFM on April 6, with Al Ansari Holding remaining the largest single shareholder after the listing.

Al Ansari Exchange was set up about 60 years ago has 231 branches throughout the UAE, offering exchange services, remittances, services for paying domestic workers and savings plans.

The company opened its first exchange branch in the UAE in 1966 and also operates in Kuwait.

“Our strong track record of successful growth … has culminated in this milestone moment,” said Mohammad Ali Al Ansari, chairman of Al Ansari Finance Services.

“We believe Al Ansari Financial Services is ready to become a publicly listed company and to offer investors a unique investment opportunity with significant exposure to a region that is expected to witness robust growth in the mid-term.”

After the offering, Al Ansari plans to pay out dividends twice in each financial year — in April and October.

It plans to pay a minimum dividend of Dh600 million in 2023, with the first half of the payment being made in October 2023 and the second half in April 2024.

Al Ansari plans a minimum dividend payout ratio of at least 70 per cent of the net profit generated going forward.

“The UAE’s global ranking as a tourist, commerce, talent and finance hub has steadfastly climbed over the years, thanks to government efforts and business-friendly policies, fuelling the growth and expansion of our business,” said Mr Al Ansari.

“Today, we are one of the leading integrated financial services groups in the UAE with a comprehensive offering. Furthermore, our customer-first and solutions-oriented mindset has enabled us to successfully scale [up] the business and provide high-quality offerings that exceed customer expectations.”

The company's net profit grew by 21 per cent in 2022 to Dh595 million from 2021 and was up 59 per cent on its 2020 results.

“We have a well-defined growth strategy that we expect to enable us to further increase our market leadership and physical dominance at home and to grow our presence in other markets,” said Rashed Ali Al Ansari, group chief executive of Al Ansari Financial Services.

“We also plan to continue to invest in our digital capabilities and customer touchpoints to ensure we provide superior service to our loyal and growing customer base.

The offering is part of a strategy to reposition the company for its next phase of growth with the IPO proceeds going to the mother entity Al Ansari Holding Company, he said at a press conference on Thursday.

“I am also proud of the incredible talent we have at the group and subsidiary levels, and I am confident that we have the right people in place to execute our growth agenda,” he said.

The UAE is the second largest outward personal remittances market globally, with a total value of $48 billion, Al Ansari said citing a report by Edgar, Dunn and Company.

Al Ansari registered 22 million personal remittance transactions last year, with the money remitted increasing 4.8 per cent to Dh737 million in 2022, compared with the previous year.

The company expects digital transactions will account for approximately 20 per cent of overall personal outward remittance transactions by 2027, an increase from 15 per cent in 2022.

The company believes exchange houses will continue to play a significant role given the large and growing low-income resident population that is unbanked.

The Al Ansari IPO follows Adnoc's listing that raised about Dh9.1 billion ($2.5 billion) from the sale of a 5 per cent stake in its gas business last week, making it the world's largest IPO so far this year.

It also comes amid a flurry of listings in the Gulf region and Dubai, which plans to bolster the size of its capital markets.

The emirate plans to list 10 state-owned companies and boost the size of its financial market to about Dh3 trillion.

Dubai also aims to set up a Dh2 billion market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

Middle East IPOs raised more than $23 billion in 2022, compared with $7.52 billion raised from 20 offerings in the previous year.

That was the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.

Between announced and rumoured IPO plans, the GCC region is expected to float 27 to 39 companies this year, according to Kamco Invest.

Abu Dhabi Commercial Bank, EFG-Hermes and Emirates NBD are leading Al Ansari's IPO.