The UAE money and exchange company Al Ansari Financial Services may raise up to Dh773 million ($210 million) via the sale of a 10% interest in an initial public offering. According to the firm, it is selling 750 million shares and has set the offer share price range at between Dh1 and Dh1.03 per share, implying a market capitalisation of between Dh7.5 billion ($2.04 billion) and Dh7.73 billion ($2.10 billion) at listing.
National Bonds Corporation, which is owned by the Investment Corporation of Dubai, the Dubai government’s investment arm, has committed to a Dh200 million cornerstone investment in the IPO.
Emirates Investment Authority has the right to subscribe for up to 5% of the offering, and the percentage of shares purchased by the EIA will be allocated before any other qualifying investors. Al Ansari anticipates paying a minimum dividend of Dh600 million in the fiscal year 2023, implying a minimum dividend yield of 7.77% to 8%.
The IPO subscription period for UAE retail investors runs from March 16 to March 23, while it finishes on March 24 for qualified investors. The final offer price will be established via a book-building process and publicized on March 27.
On April 6, Al Ansari hopes to begin trading on the Dubai Financial Exchange. The IPO of Al Ansari comes amid a frenzy of listings in the Gulf area and Dubai, which is looking to expand the size of its capital markets. In 2022, Middle East IPOs raised more than $23 billion, up from $7.52 billion from 20 offers the previous year.
Al Ansari Exchange was founded some 60 years ago and now has 231 branches around the UAE, providing exchange services, remittances, domestic worker payment services, and savings programmes. In 1966, the company built its first exchange branch in the UAE, and it also has a presence in Kuwait. The IPO by Al Ansari is part of a strategy to reposition the company for its next phase of growth, with proceeds flowing to parent company Al Ansari Holding Company.
According to Al Ansari, the UAE has the world’s second-largest outward personal remittances market, with a total value of $48 billion, according to a report by Edgar, Dunn and Company. Last year, Al Ansari recorded 22 million personal remittance transactions, with money transferred growing by 4.8% to Dh737 million in 2022, compared to the previous year.
The business anticipates that digital transactions would contribute for roughly one-fifth of total personal outward remittance transactions by 2027, up from 15% in 2022. With the huge and expanding unbanked low-income resident population, Al Ansari believes exchange houses will continue to play an important role.
The company’s net profit increased by 21% to Dh595 million in 2022, compared to the previous year, and was up 59% from the preceding year. Al Ansari’s IPO is being led by Abu Dhabi Commercial Bank, EFG-Hermes, and Emirates NBD.
