On Monday, the Dubai Taxi Company PJSC (DTC), a prominent provider of mobility solutions in Dubai, has officially announced its intention to undergo an initial public offering (IPO) and list its ordinary shares on the Dubai Financial Market (DFM).
Dubai Taxi is the largest taxi operator in the city.
The announcement of its intention to float followed Sheikh Mohammed’s new law which recognises DTC as a public joint-stock company.
Under the new law, DTC now has both financial and administrative independence, allowing it to pursue its activities and objectives, as per an official statement by the office of Sheikh Mohammed.
That said, here is all we know about the upcoming IPO following a year-long hiatus.
Dubai Taxi IPO will be open for UAE retail investors, professional investors outside US
In October, it was reported that the Dubai Taxi operator planning a $300 million IPO.
Key highlights of the offering include the availability of 624,750,000 shares, each with a nominal value of AED0.04, representing 24.99 percent of DTC’s total issued share capital.
These shares, constituting the entire offering, belong to the Department of Finance for the Government of Dubai, acting as the selling shareholder.
The offering will be open to UAE retail investors and professional investors outside the US, with the subscription period running from November 21 to November 28 for retail investors and November 29 for professional investors.
The final offer price will be determined through a book-building process.
The Internal Sharia Supervision Committee of Emirates NBD Bank PJSC has issued a Shariah pronouncement, affirming the offering’s compliance with Shariah principles.
The capital structure of DTC, at the time of listing, is set at AED100,000,000 divided into 2,500,000,000 shares with a nominal value of AED0.04.
The company plans to pay dividends twice a year starting from the fiscal year 2024, with a minimum of 85 percent of annual net profit available for distribution.
The selling shareholder aims to sell 24.99 percent of DTC’s total issued share capital, with the offering divided into the UAE Retail Offering and the Qualified Investor Offering.
The subscription periods for these offerings are expected to run from November 21 to November 28 and November 21 to November 29, respectively.
The offer price per share will be determined through a book-building process, with completion of the offering and admission to trading on the DFM expected in December 2023, subject to regulatory approvals and market conditions.
Rothschild & Co Middle East Limited serves as the Independent Financial Advisor, while Citigroup Global Markets Limited, Emirates NBD Capital PSC, and Merrill Lynch International have been appointed as Joint Global Coordinators and Joint Bookrunners.
EFG-Hermes UAE Limited and First Abu Dhabi Bank PJSC are designated as Joint Bookrunners, and Emirates NBD Bank PJSC as the Lead Receiving Bank, with additional support from other Receiving Banks.
DTC, established in 1994, holds approximately 44 percent of the market share in Dubai’s taxi fleet and has expanded its services to include VIP limousines, buses, and last-mile delivery services.
The company’s IPO is part of Dubai’s continued commitment to fostering world-class businesses and strengthening its capital markets.
Dubai to restart privatisation drive with Dubai Taxi IPO
The Dubai Taxi IPO will mark the first share sale by the government in over a year.
The IPOs are part of a plan introduced two years ago to list 10 state-owned companies, aiming to boost trading volumes and catch up with IPO drives in Abu Dhabi and Riyadh.
Dubai had not announced listings this year, contributing to a decline in overall IPO volumes in the Middle East.
Aside from Dubai Taxi’s IPO announcement, recent IPO announcements in the UAE include Investcorp Capital Plc, which raised $451 million and Phoenix Group, a cryptocurrency mining hardware retailer, which announced an Abu Dhabi IPO of up to $370 million.
Following the taxi IPO, Dubai’s Roads & Transport Authority plans to sell shares in Dubai Parking next year as part of its asset monetisation strategy, as per a report by Bloomberg.
In 2022, the authority raised $1 billion from the listing of road-toll operator Salik Co., which has been the best-performing privatisation in the city with shares up 57 percent from the offer price.
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