IPO wave won’t be slowing down anytime soon: The UAE’s robust IPO momentum is expected to carry into this year, with at least five companies expected to list in 2024, according to Ernst & Young’s MENA IPO Eye: Q4 2023 report (pdf). The UAE is expected to come in second in the region in terms of volume of IPOs, after Saudi Arabia, which is expected to see 19 listings, Ernst & Young said.

Who might debut this year?

  • Supermarket chain Spinneys Dubai is reportedly planning to list up to 30% of its shares on DFM in 2Q 2024, Reuters reported last year;
  • Supermarket operator LuLu Group International is looking to appoint bankers for a potential USD 1 bn dual listing on the ADX and Riyadh’s Tadawul in 2H 2024;
  • Dubai’s Road and Transport Authority (RTA) could list its recently formed car parking space manager, Parkin, following the AED 1.2 bn IPO of Dubai Taxi on DFM in December;
  • Dubai-based healthcare investment and education firm Amanat Holdings tapped EFG Hermes and First Abu Dhabi Bank for a listing of its healthcare unit as soon as this year, potentially raising some USD 200 mn;
  • Dubai-based shisha producer Advanced Inhalation Rituals reportedly appointed Citigroup and Morgan Stanley to advise on its IPO, slated for this year, which could raise some USD 800 mn.

The Emirates led the region in terms of IPO proceeds last year, accounting for more than half of proceeds, with eight listings raising a collective USD 6.1 bn. Among the largest IPOs: Adnoc Gas, which raised USD 2.5 bn, PureHealth, which raised USD 987 mn; and Investcorp Capital, which raised USD 451 mn.

The Middle East saw 48 IPOs last year: Stock markets in the region saw 48 companies listtheir shares in 2023, with proceeds amounting to USD 10.7 bn — marking a 51% y-o-y decline in proceeds. Energy and logistics companies’ IPOs accounted for more than half of that, with just five IPOs in those sectors raising a combined USD 7.83 bn last year.

Looking ahead:Despite the current geopolitical situation in the region, Ernst & Young’s forecast of the region’s IPO market is bright, with some 29 private companies and 26 funds across various sectors expected to IPO during the year, including from KSA, Egypt, and Kuwait, E&Y said.

THE GLOBAL ANGLE-

Global IPO proceeds tumbled 33% y-o-y in 2023 to USD 123.2 bn, while the volume of IPOsalso fell 8% y-o-y to 1,415 IPOs in total amid monetary tightening, and worsening economic conditions in China according to the report.

“Enthusiasm for IPOs is high” in 2024amid expectations of interest rate cuts and moderating inflation, the report said. However, geopolitical instability could “undermine confidence,” it added.

“IPO candidates should keep their eyes on building fundamentals and managing price expectations to capitalize on the fleeting windows as 2024 progresses,” EY Global IPO leader George Chan said.

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