Parkin raises $429m in record oversubscribed IPO deal

Investor demand for the first public offering in the UAE this year climbed to $71bn as the deal was 165 times oversubscribed

Parkin is the biggest provider of paid parking spaces and services in Dubai. Sarah Dea / The National

Parkin, the company set up by Dubai to oversee parking operations in the emirate, has raised Dh1.57 billion ($429 million) from its initial public offering, the first in the UAE this year, which received record investor demand of Dh259 billion ($71 billion).

The selling shareholder, Dubai Investment Fund, sold 749.7 million ordinary shares of the company, representing 24.99 per cent of the total issued share capital, Parkin said on Thursday.

The final offer price of Dh2.10 per share at the top of the price range announced earlier this month, implies a market capitalisation at listing on the Dubai Financial Market of Dh6.30 billion.

The subscription period for retail investors ran from March 5 to March 12, while for institutional investors, it ended on March 13.

The company expects to start trading on the Dubai bourse on March 21.

The offering received record interest, with total gross demand for the IPO hitting Dh259 billion.

It was oversubscribed by about 165 times across retail and institutional tranches of the deal, “the highest ever oversubscription level achieved on the DFM”, for a public float, the company said.

The qualified investor tranche attracted investor interest from across the globe of more than Dh230 billion, implying an oversubscription of about 166 times at the final offer price.

The aggregate demand for the retail component of the deal from investors in the UAE reached Dh29 billion and was oversubscribed by 153 times.

On Wednesday, the company increased the number of shares offered to retail investors in the public offering, raising it to 89.96 million shares, or about 12 per cent of the total shares being sold from the previous 10 per cent.

Close to 63,000 subscription applications were submitted during the bookbuilding process, which is a record for a DFM IPO.

The overwhelming demand underpins investor confidence in Dubai’s critical infrastructure and its long-term growth prospects, it said.

“Today represents a milestone moment for our business as we secured record-breaking investor demand for Parkin shares,” Mohamed Al Ali, chief executive of Parkin, said.

As a part of the emirate’s critical infrastructure, Parkin is central to Dubai’s growth plans and the IPO will enable the company to continue providing “seamless, sustainable and innovative mobility solutions”, Mr Al Ali said.

“We are proud to support Dubai’s privatisation programme and the continued expansion of the Dubai Financial Market … and reaffirm our commitment to delivering long-term value to all our stakeholders,” he said.

The Dubai Financial Market has seen a flurry of IPO activity in recent quarters. Chris Whiteoak / The National

Parkin’s IPO is part of Dubai's plans to expand the size of its financial market to Dh3 trillion.

The emirate in November 2021 said it would list 10 state-owned companies and establish a Dh2 billion marketmaker fund to encourage listings from private companies in sectors such as energy, logistics and retail.

Since the announcement, the Dubai bourse has seen significant IPO activity with, companies in the emirate raising Dh34.5 billion through share sales.

Aggregate investor demand for those listings reached more than Dh1 trillion, the Dubai Securities and Exchange Higher Committee said on Wednesday.

Five state-owned enterprises have been listed on the DFM since 2022.

Parkin is the largest provider of paid parking spaces and services in Dubai, accounting for more than 90 per cent of the emirate's on and off-street paid parking market.

It operated about 175,000 on and off-street parking spaces across 85 locations, and close to 18,000 spaces across seven developer-owned parking lots as of the end of last year.

The company, which issues permits to drivers for subscription to public parking and reserving spaces, is also responsible for establishing, designing and managing private parking spaces. It also invests in related businesses.

Parkin's revenue for the 2023 financial year climbed 13.5 per cent annually to Dh779.4 million.

Earnings before interest, taxes, depreciation and amortisation rose by 23 per cent during the period to Dh414.4 million.

Emirates NBD Capital, Goldman Sachs International and HSBC were joint global co-ordinators and joint bookrunners for the IPO, while Abu Dhabi Commercial Bank, EFG-Hermes UAE and First Abu Dhabi Bank were joint bookrunners on the transaction.