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Micropolis is now trading on NYSE: Dubai-based robotics manufacturer MicropolisHolding debuted a 12.92% stake — good for 3.9 mn shares — on the New York Stock Exchange last week at USD 4.0 apiece, giving it a market cap of USD 135.5 mn at listing, according to a statement. The final transaction raised some USD 15.5 mn, coming in at the lower end of the company’s initial expectations, which had aimed for a listing of 8.2 mn shares, priced between USD 4-5 per share.
The company is currently trading lower: MicroPolis’ shares fell 10.91% at the close of trading on Friday, reaching USD 3.78 per share, and USD 3.45 in after-hours trading. On its first day of trading, it was down 5% to AED 3.8 apiece.The underwriter might choose to exercise the over-allotment option — aka green shoe option — that would allow it to debut 581.25k additional shares for a period of 45 days following the closing of the offering to stabilize the stock price and avoid significant price fluctuations.
What’s next? The company plans to use USD 2.6 mn of its proceeds to cover the offering’s expenses, with the rest being earmarked as capex and allocated towards R&D activities and expanding the team, according to the prospectus. Substantial shareholders can’t execute transactions on their holdings for a period of 180 days from the effectiveness of the registration statement.
Downside risks: New investors will face an immediate dilution to USD 0.22 apiece down from USD 4.0 apiece, reflecting the difference between the IPO price and the adjusted book value, the prospectus reads. Any significant declines to the share price could see investors holding shares worth less than what they paid for them. NYSE-listed companies must maintain a minimum share price of USD 1 per share to avoid the risk of delisting.
No dividends for now: The company intends to retain all available funds and future net income to support business development, growth, and debt repayment, it said in the disclosure. Micropolis has not yet achieved revenues, as most of its current projects are collaborative in nature.
The company logged a net loss of USD 3.15 mn in 1H 2024, and USD 8.91 in revenues. Substantial earnings are not expected until the company begins commercial production, which is expected to be by 2Q 2025, the prospectus had said.
Investors are buying into the future prospects of the industry: Investors are normally interested in this type of offering despite the initial dilution and the no-dividend policy when the issuer is raising capital to fund growth, expand operations, and improve its financial position — especially when it’s a future-focused industry like robotics. The expectation is that these investments will lead to future value appreciation, potentially offsetting the short-term dilution as the business scales and its market value increases.
ADVISORS- NetWork 1 Financial Securities acted as the sole bookrunner and underwriter on the IPO. Loeb & Loeb acted as US securities counsel to the company, and Hunter Taubman Fischer & Li acted as US securities counsel to Network 1 Financial Securities.
About the company: Founded in 2014 by Fareed Aljawhar (LinkedIn), Micropolis is a robotics manufacturer specializing in the production of autonomous mobile robots (AMRs) that use wheeled electric vehicle platforms and are equipped with autonomous driving technology.
