Eversheds international law firms comments on the recent IPOs

Comment from Jonathan Stanley, Principal Associate, Eversheds on the recent successful IPOs of Marka and Emaar Malls on the DFM and of Emirates REIT on Nasdaq Dubai and the proposed Amanat IPO.

“The proposed Amanat IPO is strong evidence of continuing interest in regional and international interest in IPOs in the UAE and the GCC more widely, despite the recent softening in equity markets globally.

It is encouraging that trading companies and investment entities alike have been able to raise significant equity capital on DFM and Nasdaq Dubai, rather than seeking a share or depositary receipt listing on a major global exchange as was the case for issuers including Damac Properties, NMC Healthcare and Al Noor Hospitals.

It is also interesting to see the reappearance of “greenfield IPOs”, where the IPO vehicle has no significant existing assets or trading history and is raising equity to acquire or take large stakes in businesses in specifically targeted sectors (which we understand will be education and healthcare in the case of Amanat), with the marketing exercise therefore focussing heavily on the track record and market reputation of the founders and management and their ability to deliver suitable acquisitions and investments. 

Hopefully, continuing interest in IPOs across the UAE and the wider region, combined with proposed company and securities law reforms in the UAE to reduce the minimum free float in IPOs to 30 percent, permit IPOs to be conducted as (at least partial) exits by enabling shareholders to sell existing shares rather than the Company issuing new shares and to allow IPO prices to be determined by book building methods, will form the basis of an enduringly fruitful IPO market through 2015.”