Dubai Investments plans to float 20% stake in DIP Holding in UAE's first IPO of the year

Dubai Investments intends to launch a 20% stake sale in its subsidiary DIP Holding, marking the United Arab Emirates' inaugural initial public offering of 2023 and one of few in the Gulf region amidst the ongoing Iran conflict. The offering, comprising 1.74 billion shares, will be conducted in four installments, according to a statement released by DIP Holding on Monday. The sale period spans from October 27 to November 3, with the market debut scheduled for Dubai Financial Market, likely around November 11.

DIP Holding, a real estate business owned by Dubai Investments, encompasses a sprawling 23 million square meter development comprising industrial, commercial, and residential spaces. This includes offices, hotels, and residences that accommodate over 150,000 residents and around 1,000 tenants. However, DIP Holding will not benefit from the IPO proceeds, as all shares being offered are existing shares owned by Dubai Investments and being sold by the company itself.

Notably, the Gulf IPO market has experienced a significant slowdown this year due to the Middle East tension. In fact, equity issuance in the Middle East and Africa amounted to $2.3 billion in the first nine months of the year, a staggering 79% decline from the previous year and the lowest level since 2017, as reported by LSEG data. The four banks acting as joint global coordinators for the offering are Citi, Emirates NBD, and HSBC.

DIP Holding anticipates paying annual dividends of 700 million dirhams ($190.6 million) for the current financial year, with projections of 725 million dirhams and 750 million dirhams for 2027 and 2028, respectively. The IPO initiative was reportedly under discussion between Dubai Investments and banks in the previous year, as per Reuters.