Investcorp Capital starts trading on Abu Dhabi bourse after $451m IPO

Shares of the asset manager rose 4.34 per cent in early trading

Executives from Investcorp Capital and the Abu Dhabi Securities Exchange during the company's trading debut on Friday. Photo: Investcorp
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Bahrain-based asset manager Investcorp Capital has begun trading on the Abu Dhabi Securities Exchange following an initial public offering that raised Dh1.66 billion ($451 million).

Shares of the company, a unit of Mubadala Investment Company-backed Investcorp, rose as much as 4.34 per cent to hit Dh2.40 on Thursday, before retreating to Dh2.24 in midday trading.

Investcorp, which recorded strong demand from local and international investors for the IPO, increased the number of shares on offer to 720 million ordinary shares, or 32.85 per cent of the company's total issued share capital, up from the initial offer of 29.34 per cent.

They were priced at the top end of the range at Dh2.30 a share.

The offering, comprising 321.5 million new shares and 398.5 million existing shares, was fully subscribed and allocated.

The IPO gave the company a market capitalisation of about Dh5.04 billion.

The company plans to pay dividends of at least Dh422 million for its financial year ending June 30, 2024, implying a dividend yield of 8.4 per cent on an absolute and pro-rated basis and 13.5 per cent on an annualised basis for IPO investors, it said in a statement on Friday.

“This is a proud and historic moment for Investcorp Group as Investcorp Capital begins life as a listed company on the ADX, bringing with it new professional and institutional shareholders from the region and around the world," said Mohammed Alardhi, executive chairman of Investcorp Group.

Investcorp Capital's IPO comes in the middle of a listings boom in the Arabian Gulf region, driven by government incentives, foreign investor interest and diversification efforts.

IPO activity in the wider Middle East and North Africa region continued to gather momentum in the second quarter of 2023, as the volume of IPOs on regional bourses surged 44 per cent annually amid robust economic growth, data from global consultancy EY showed.

“This listing is a testimony to the trust that international companies place in the UAE’s capital markets and the country’s stable economy and diversified investor ecosystem," said Abdulla Al Nuaimi, chief executive of the ADX.

Investcorp Capital intends to use the net proceeds of the offering to further develop its capital financing services business and increase its investments into the capital deployment business of about $100 million, the company said in October, when it announced its intention to list shares.

It also plans to use the funds to finance strategic growth avenues and general corporate purposes to "provide all shareholders with unrivalled investment opportunities and consistent returns", said Timothy Mattar, chief executive of Investcorp Capital.

"The demand from a broad range of investors is testament to the confidence and trust our new shareholders have placed on our strategy and growth potential."

The company invests capital into funds managed or controlled by its clients, or directly into alternative investments, including private corporations, property assets and collateralised loan obligations.

It has interests in private equity, real estate and credit management, and holds general partner positions in North America, Europe, the Middle East and Asia.

Investcorp has made major moves to boost its global portfolio. In September, it bought 31 industrial properties in the US worth $216 million, while in July it said it was investing $100 million to buy a majority stake in SEC Newgate, an Italy-based global strategic communications and advocacy group.

Moelis & Company UK was the independent financial adviser for the IPO, while Citigroup Global Markets, Emirates NBD Capital, First Abu Dhabi Bank, Goldman Sachs International and HSBC Bank Middle East were joint global co-ordinators and joint bookrunners on the deal.

Emirates NBD Bank and First Abu Dhabi Bank are the joint lead receiving banks, while Al Maryah Community Bank and Mashreqbank are receiving banks.

Updated: November 17, 2023, 10:37 AM