Institutional investors were more than two times oversubscribed to the initial public offering of Emaar Properties’ Egyptian subsidiary after only a few hours, according to a market source.
The Dubai-based developer announced on Wednesday morning an indicative price range of 3.50 Egyptian pounds (Dh1.68) to 4.25 pounds a share for the IPO of 600 million shares in Emaar Misr. At the maximum price, the IPO would raise about 2.55 billion pounds.
The IPO is expected to be the largest offering of its kind on the Egyptian stock exchange since that of the Talaat Moustafa Group in 2007.
Subscription for the 510 million shares allocated to institutional investors began yesterday and will run until June 16.
But a local market source said that the orders for the institutional tranche had already been covered “more than three times over” by mid-afternoon yesterday.
“The level of interest shown from the investment community so far has been very encouraging,” said Emaar’s chairman, Mohamed Alabbar.
The top-end price of 4.25 pounds set by Emaar comes in below the 4.49 pounds figure that Emaar Misr set as a maximum price earlier this week, as well as the 4.70 pounds recommended by the accountancy firm Grant Thornton last month.
However, a Cairo-based banking source said that the 4.49 pounds figure represented the maximum value for the offering set by the Egyptian Financial Supervisory Authority and not a figure determined by the company.
The subscription period for retail investors, who have been allocated about 90 million shares, will open on June 16 and will run until June 25.
The announcement of the final offer price for the shares is expected on June 18, with shares expected to commence trading on the Egyptian stock exchange on or around July 2.
The retail portion of the IPO is expected to be at least four to five times oversubscribed after similar appetite for recent offerings from Edita Food and Arabian Cement, said Mohamed Radwan, the head of equities at Pharos Holding in Cairo.
‘We’ve seen a number of larger stocks like Orascom Telecom and Mobinil delisting in recent years, meaning there are only really a handful of blue chips remaining,” he said.
“The entrance of Emaar Misr should add to their number and should be healthy for the market.”
EFG Hermes and JP Morgan are acting as joint bookrunners for the offering, with Emirates Financial Services acting as the lead manager.
jeverington@thenational.ae
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