Dubai Taxi Co. has achieved record investor demand in its $315 million initial public offering (IPO), with orders surpassing 150 billion dirhams ($41 billion), marking the highest oversubscription level ever for a Dubai IPO. The IPO, Dubai’s first privatisation in over a year, garnered significant interest, with the institutional investor tranche being nearly 135 times oversubscribed. The government of Dubai divested a 25 per cent stake, comprising 624.75 million shares, at 1.85 dirhams each, the top end of the marketed range, valuing Dubai Taxi at 4.62 billion dirhams. Trading is scheduled to commence on December 7.
This robust demand for Dubai Taxi’s IPO underscores the stark contrast between the thriving listings market in the Gulf region and the subdued global sentiment marked by challenges like high interest rates and market volatility over the past two years. The Gulf region, supported by elevated oil prices, strong local investor demand, and government initiatives to list state-owned companies, has emerged as a hotspot for IPOs. Dubai, in particular, has excelled, with its benchmark index rising 20 per cent this year, driven by an increase in property-related shares.
Investor appetite for Dubai Taxi’s IPO adds to the Gulf’s standout performance in listings this year, with approximately $8.4 billion raised through IPOs in the region, constituting over a third of the total listing volumes in Europe, the Middle East, and Africa.
Dubai’s success in raising $8.3 billion through stake sales in state-owned companies in 2022 reflects its commitment to listing state-owned entities, aligning with similar initiatives in Abu Dhabi and Riyadh. Dubai Taxi represents the city’s second IPO of 2023, following the successful listing of Al Ansari Financial Services PJSC in March. Citigroup Inc., Emirates NBD Capital, and Bank of America Corp. are joint global coordinators for the IPO, with Rothschild & Co. serving as an independent financial adviser.
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