Alec Holding seeks to raise up to $381 million from Dubai IPO

Price range of Dh1.35 to Dh1.40 per share implies a market capitalisation of as much as Dh7 billion at listing

Dubai Hills Mall is one of the flagship projects undertaken by Alec Holdings. Photo: Emaar Malls Management

Construction and engineering company Alec Holdings is looking to raise as much as Dh1.4 billion ($381 million) from the sale of a 20 per cent stake through an initial public offering on the Dubai Financial Market.

The Dubai-based company has set the IPO price range between Dh1.35 and Dh1.40 per share, implying a market capitalisation at listing of between Dh6.75 billion and Dh7 billion, it said in a statement on Tuesday.

The Investment Corporation of Dubai (ICD), the principal investment arm of the Dubai government, is currently the sole shareholder of Alec and is selling one billion ordinary shares, which equals 20 per cent of the company’s share capital.

The subscription period for the public offering starts on Tuesday and will run until September 30, with tranches open to individual subscribers, professional investors outside the US, and eligible employees from Alec and ICD.

“The final offer price will be determined through a book-building process and is expected to be announced on October 1,” the company said.

The selling shareholder reserves the right to “increase the size of the offering at any time prior to the end of the subscription period at its sole discretion”, Alec added.

The company expects its shares to start trading on the DFM on or around October 15.

Alec has reserved 10 per cent of offered shares for the Emirates Investment Authority and the Pensions Social Security Fund of Local Military Personnel.

Both entities are entitled to subscribe to 5 per cent each of the reserved quota, however, if the EIA and the fund do not exercise their preferential rights, those shares will be available to other professional investors, the company said.

Alec expects its shares to start trading on the DFM on or around October 15. Chris Whiteoak / The National

Dividend guidance

The company is expected to distribute a cash dividend of Dh200 million in April 2026. It will also pay a dividend of Dh500 million for the 2026 financial year, with the first payment in October 2026 and the second payment in April 2027.

“Thereafter, the company expects to distribute cash dividends on a semi-annual basis (in April and October of each year), with a minimum payout ratio of 50 per cent of the net profit generated for the relevant financial period,” Alec said.

The company on Monday said its revenue rose 56 per cent annually in the first half of the year to Dh5.36 billion, with net income reaching Dh239 million.

As of June-end, Alec’s pipeline of large-scale projects stood at Dh35.4 billion, with 79 per cent of the current backlog secured in the past two years.

“We enter the public markets from a position of strength, supported by a buoyant regional construction sector underpinned by ambitious national agendas in our home market and in Saudi Arabia, and a favourable economic environment,” the company's chairman Hussain Nasser Lootah said on Monday, when it announced its IPO.

Founded in 1999, Alec became a subsidiary of ICD in 2017 and, along with its core construction business, offers services spanning fitout, mechanical, electrical and plumbing, modular construction, data centre solutions, energy solutions, technology, facades, renewables and equipment rental.

It has projects across the UAE and Saudi Arabia, including One Za’abeel, a mixed-use development in Dubai; indoor theme park SeaWorld Abu Dhabi; and Dubai Hills Mall.

Continued IPO momentum

Alec's public offering is the latest among a string of IPOs in the UAE's capital markets on strong investor demand as well as government efforts to boost the equity markets.

There were seven IPOs across the country last year, including Talabat Holding, retailer Lulu Group, ADNH Catering, NMDC Energy and Alef Education. IPOs in the UAE accounted for 47 per cent, or $6.2 billion, of total stock launch proceeds in the Gulf region last year, according to PwC data.

The IPO momentum continued this year with the listing of Alpha Data on ADX and Dubai Residential Reit on the DFM. Alpha Data, a UAE technology company, raised $163 million from its offering, while Dubai Residential Reit's IPO size reached $584 million.

Last week, Dubai Investments said it plans to list up to 25 per cent of its unit Dubai Investments Park. The company, in which ICD also holds a stake, is currently in discussions with banks on the IPO, it said in a statement to the DFM.

Across the wider Gulf, $2.3 billion was raised from four IPOs in the second quarter of this year, a slight decrease from $2.6 billion raised from eight listings in the same period last year, according to PwC.