IPO News | Dubai state utility DEWA launches first of 10 planned listings

Representative image.

The Dubai Electricity and Water Authority (DEWA) on March 15 launched the first initial public offering (IPO) among 10 planned listings of state-linked companies aimed at reviving the domestic stock exchange.

The state utility announced its intention to float (ITF) in an emailed statement, adding that the Dubai government planned to offer 3.25 billion shares, or a stake of 6.5 percent in the company. However, the company has not disclosed how much money it aims to raise.

Bloomberg had previously reported the company may be valued at as much as $25 billion, making the listing one of the largest ever in the Middle East’s main financial hub.

The emirate is pushing ahead with the IPO of DEWA even as Russia’s invasion of Ukraine roils equity markets around the world.

After the ITF was released, DEWA's chief executive Saeed Mohammed Al Tayer said in a news conference, that the company has the option to increase the size of the offering beyond 6.5 percent, subject to demand and market conditions.

Earlier on March 7, two sources told Reuters that DEWA will delay the announcement of its intention to float (ITF).

Dubai's deputy ruler, Sheikh Maktoum Bin Mohammed, in November announced plans to take 10 government-linked companies public to boost stock market activity.

The listing plans aim to help the Dubai stock market compete more effectively with bigger exchanges in the region, such as those in Saudi Arabia and neighbouring Abu Dhabi.

DEWA expects to pay a minimum annual dividend of 6.2 billion dirhams ($1.69 billion) over the next five years, starting from October 22, with dividends planned twice a year, in April and October.

The company is offering two tranches, to institutional investors and retail investors, from March 24.

The business will grow with Dubai’s population expected to increase to 5.8 million by 2040, Chief Executive Officer Saeed Mohammed Al Tayer told reporters. Energy demand increased by 11 percent in 2021, almost triple DEWA’s expectation, he said.

A subsequent listing of DEWA is expected on the Dubai Financial Market in April. The shares held by the Dubai government after the IPO are subject to a six-month lock-in period.

Dubai's Emirates NBD is the financial adviser on the transaction and U.S. advisory Moelis & Co is the independent financial adviser.

Citigroup Global Markets, Emirates NBD's investment banking arm, and HSBC are its joint global coordinators, the company said.

Credit Suisse, EFG Hermes, First Abu Dhabi Bank and Goldman Sachs are joint bookrunners, the company added.