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Dubai-based company Parkin, which showed its intentions to launch an initial public offering (IPO) recently, looks set to float 24.99 per cent or 749.7 million shares on the Dubai Financial Market next month, according to Dubai Media Office tweet on Tuesday.
The parking space operator will be the first company to launch an IPO in 2024 in Dubai. It will start subscriptions on March 5 and will continue until March 12 for retail investors and end on March 13 for institutional investors.
As part of the qualified investor offering, five per cent will be reserved for the Emirates Investment Authority and five per cent for the Pensions and Social Security Fund of Local Military Personnel.
As per the company prospectus, the offer price range will be made public on March 5 and the final offer price will be set on March 14. The company plans to list on March 21.
Retail investors will get an opportunity to buy 10 per cent of the stock float and be guaranteed to receive up to 2,000 shares apiece. Emirates NBD Bank is the lead receiving bank of the IPO.
The minimum application size for the retail tranche is Dh5,000 and thereafter in increments of Dh1,000 apiece, according to the prospectus.
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Ahmed Hashem Bahrozyan, Chairman of Parkin’s board of directors, said Dubai has become one of the world’s leading cities for business, lifestyle, and innovation.
"Parkin’s IPO will enable us to build on and accelerate our progress in supporting these ambitions, driving the Emirate’s future success. As Dubai’s population and economy continue to grow, our company will grow with it. As a result, I am confident in Parkin’s future opportunities, delivering on our vision to become one of the leading parking providers in the world,” he said.
Mohamed Al Ali, CEO of Parkin, echoed similar views and said Parkin will operate at the centre of the city’s exciting and ambitious growth plans.
"As we begin this new chapter, we remain steadfast in our commitment to drive growth, delivering value to our stakeholders, and shaping the future of our industry,” he said.
Atik Munshi, managing partner, FinExpertiza UAE, said Parkin IPO is expected to attract retail investors looking to capitalise on investment opportunities in the market.
"With the increase in permanent and floating populations, there is always a dearth of parking spaces in Dubai, particularly in the commercial and business areas. With the launch of Parkin's IPO, investors can get a slice of the lucrative market, which has even better potential in the future," Munshi told Khaleej Times on Tuesday.
Third RTA entity
Parkin, which closed 2023 with Dh779.4 million in revenues and Dh414.4 million net profit, will be the third entity of Dubai's Road and Transport Authority (RTA) after Salik and Dubai Taxi Company. It operates 197,000 parking spaces across 85 locations in the city, another 4,000 or so spaces at nine multi-storey car parks, and about 18,000 spaces at seven developer-owned facilities.
The entity oversees the RTA's paid parking facilities and was incorporated as a public joint stock company in January. Under the law, Dubai's ownership of the company will not fall below 60 per cent when its shares are sold to the public.
After the offering, Parkin plans to pay a semi-annual dividend in April and October, according to its chief financial officer Khattab Abu Qaoud.
"The minimum dividend payout for 2024 would be more than the net profit for the year, or exceed free cash flow to equity," he said.
The listing of the parking business follows the RTA's successful IPO of Dubai Taxi Company, which attracted $315 million in November. It was oversubscribed 130 times, covered with over $41 billion of demand from investors.
"Since Parkin is going to be the exclusive service provider to RTA, it will enjoy a unique status of near zero competition. This IPO is expected to be oversubscribed multiple times," Munshi said.
"Users can look forward to more technology-driven parking processes whereby hassle of parking is reduced since Parkin will now solely concentrate on improvement and enhancement of parking services," he said.
Last year, the RTA raised $1 billion and drew orders of $50 billion for a 24.9 per cent stake in a public share sale of its toll-road business Salik.
The listing of Dubai Electricity and Water Authority was the largest GCC IPO in 2022, raising $6.1 billion. State-owned Tecom, Salik and Empower collectively raised $2.2 billion in June, September and November 2022, respectively.
Five state-owned enterprises have listed on the DFM since 2022. Dubai raised nearly $8.5 billion from five IPOs last year, fuelled by a government privatisation plan to list 10 state-linked companies to boost stock market activity.
Companies in the region raised $21.9 billion through IPOs last year, more than half the total for the wider Europe, Middle East and Africa region, Dealogic data shows.
muzaffarrizvi@khaleejtimes.com
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