BrazilIPO advisors guide Al Ansari through successful stock listing in Dubai
Dubai’s first initial public offering of 2023 has enjoyed a sunny start to its life as a listed company, with the shares of Al Ansari Financial Services Group surging upwards since its trading debut on the Dubai Financial Market.
Based in Dubai, Al Ansari is a financial services group which operates the largest money exchange and remittance business in the United Arab Emirates (UAE). According to its IPO filing, the company has a 3 million-strong customer base and processes 126,000 transactions per day.
A major part of its business leans on remittances, with many of its customers consisting of foreign workers living in the UAE who send money to their home countries, predominantly Pakistan, India and the Philippines.
World Bank data shows that the United Arab Emirates is the world’s second-largest remittance outflow market, with $47 billion in outflows in 2022, ranking the UAE behind only the United States.
“Remittance is an essential service that we’re providing to the public here,” he said. “It’s very resilient, unlike the foreign currency business, where it’s dependent on tourism,” said Rashed Ali Al Ansari, the CEO of Al Ansari Financial Services Group.
Going public
With the aim to raise funds for further growth, the family-owned company decided to pursue a public listing. The company put up 10% of its shares for sale – at a valuation of $2.1 billion, the IPO saw Al Ansari Financial Services raise $210 million.
During the IPO process, Al Ansari worked with a consortium of advisors, led by Emirates NBD Capital and including Abu Dhabi Commercial Bank, EFG Hermes, and Ibrahim & Partners. M&A consultants from Deloitte delivered the due diligence on the project, while Clifford Chance served as the legal advisor.
A successful roadshow and a robust IPO environment in the UAE (opposed to the current sentiment in other parts of the world) meant that the offering was oversubscribed 22 times. With an investment of 200 million dirhams, the Investment Corporation of Dubai-owned UAE National Bonds Corp (a sovereign wealth fund) landed the status of cornerstone investor.
Following its debut yesterday morning, its share price surged over 17%, confirming its robust business model. Going forward, Al Ansari expects to pay AED 600 million ($164 million) in annual dividends, implying a 7.77% yield.
“We are extremely pleased that there was a great acceptance from the market; this shows they very much trust in the growth story of the company,” commented Rashed Ali Al Ansari.
Mohammad Ali Al Ansari, Chairman of the Group said: “The listing of our shares on the Dubai Financial Market is a landmark moment for Al Ansari Financial Services, and one that will set us on a new and exciting chapter in our 57-year history. We also believe that the success of this transaction will further support the UAE’s ambitions of deepening and diversifying its capital markets by inspiring other family-owned businesses to follow in our footsteps.”
Its landmark nature
Putting context to the weight of the IPO, Adnan Fazli, a partner at Deloitte, said: “This is a landmark transaction, as it represents the first listing of the year on the Dubai Financial Market and the first large family-owned business coming to the public market. This demonstrates a practical option for family businesses to consider for their monetization and to achieve their capital raising objectives.”
Scott Whalan, Deloitte Middle East’s Family Enterprise Leader added: “Al Ansari’s IPO shows that the capital markets could help family enterprises accelerate their transformation and help fulfill their true potential. We are proud to have supported Al Ansari throughout this journey to IPO which marks another successful UAE listing.”
A report by KPMG released last year suggested that family-owned businesses make up approximately 60% of the Gulf region’s gross domestic product (GDP). The sector employs around 80% of the total workforce.
Building on the sector’s strong fundamentals and optimistic outlook, IPO experts expect more family businesses to follow in Al Ansari’s footsteps to the stock market.
The Al Ansari IPO follows a massive listing in Abu Dhabi. Early March, Adnoc Gas raised $2.5 billion, and similarly, its shares rapidly traded upwards over its listing price.
