Al Ansari Financial Services, the UAE money and exchange company, may raise as much as Dh773 million ($210 million) from the sale of a 10 per cent stake in an initial public offering.
The company is selling 750 million shares and set the offer share price range at between Dh1 and Dh1.03 a share, implying a market capitalisation that is between Dh7.5 billion ($2.04 billion) and Dh7.73 billion ($2.10 billion) at listing, it said on Thursday.
National Bonds Corporation — owned by the Investment Corporation of Dubai, the investment arm of the Dubai government — has committed to a cornerstone investment worth Dh200 million in the IPO.
Emirates Investment Authority is entitled to subscribe for up to 5 per cent of the offering, and the percentage of shares which the EIA may purchase will be allocated before they are allotted to any other qualified investors.
Al Ansari expects to distribute a minimum dividend of Dh600 million for the 2023 financial year, implying a minimum dividend yield of 7.77 per cent to 8 per cent.
The first half of the dividend payment will be made in October 2023 and the second half in April 2024.
The IPO subscription period runs from March 16 to March 23 for UAE retail investors while that for qualified investors ends on March 24.
The final offer price will be determined through a book-building process and will be announced on March 27.
Al Ansari expects to start trading on the Dubai Financial Market on April 6.
Al Ansari's IPO also comes amid a flurry of listings in the Gulf region and Dubai, which plans to bolster the size of its capital markets.
Middle East IPOs raised more than $23 billion in 2022, compared with $7.52 billion 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.
Al Ansari Exchange was set up about 60 years ago and 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.
Al Ansari's IPO is part of a strategy to reposition the company for its next phase of growth, with proceeds from the offering going to parent entity Al Ansari Holding Company.
The UAE is the second-largest outward personal remittances market globally, with a total value of $48 billion, Al Ansari said earlier this month, citing a report by Edgar, Dunn and Company.
Al Ansari registered 22 million personal remittance transactions last year, with the money remitted increasing by 4.8 per cent to Dh737 million in 2022, compared with the previous year.
The company expects digital transactions to account for about a fifth of overall personal outward remittance transactions by 2027, up from 15 per cent in 2022.
Al Ansari believes exchange houses will continue to play a significant role, given the large and growing low-income resident population that is unbanked.
The company's net profit grew by 21 per cent to Dh595 million in 2022, compared to the previous year, and was up 59 per cent on its 2020 results.
Abu Dhabi Commercial Bank, EFG-Hermes and Emirates NBD are leading Al Ansari's IPO.