Dubai: Al Ansari Financial Services has set a price range of Dh1-Dh1.03 for its IPO, which ends today (16 DFM or ADX.
The IPO offers 750 million shares in a group whose flagship Al Ansari Exchange is the UAE’s market leader in remittances. The details of the price range were revealed through a newspaper ad.
This values the company at Dh7.5-7.725 billion.
Al Ansari’s subscription runs until March 24 for a float offering 10 percent of the Dubai-headquartered company to retail and institutional investors. The funds raised will be used to expand the group’s already well-established presence in the United Arab Emirates and also to undertake strategic forays into some of the other Gulf markets.
“There is a very strong correlation between the number of stores and market share,” said Rasheed Al Ansari, CEO, at a recent media briefing. “In the last few years we have opened 41 stores and 60 percent of them have been profitable from the first month – we have never seen that in the company’s history.
“This means that the customer wants to come to us and interact with us via physical branches. We will invest energy and effort to expand the store network and meet the demand in the market. We expect to have implemented 60 (new) stores in the coming quarters.
“Just to give you an indication of the size of the company, we have a 35 percent market share in the UAE when it comes to foreign exchange transactions and 38 percent for remittances.”
The funds will also come in handy to expand the digital side of business services as remittance flows are already seeing large transactions through online and app options in the Gulf.
A third post-IPO push for Al Ansari would be to increase its “value proposition” in higher-margin corporate remittances.
“The remittance business is an integral part of the UAE/Gulf markets – and as a market leader, Al Ansari can do much to aim for higher growth in the years to come,” said a market analyst. “How quickly it can get into the other golf markets will be critical.”
Attractive prices
‘The Dh1-Dh1.03 stock range values Al Ansari at an earnings multiple of between 12x and 12.5x, which is quite attractive compared to regional and international benchmarks. Al Ansari marks the first “pure play” IPO by a family in the UAE, encouraging other such private companies to raise capital in the domestic financial markets for their expansion plans. We expect more to follow in the coming year as the shift towards capital markets and equity increases.’
– Sameer Lakhani, Managing Director at Global Capital Partners
Presence in Kuwait
The operations in Kuwait, where the company started in 2002, will soon be fully owned by Al Ansari Financial Services. Upon completion of the transaction, this gives the group a “strong presence in the world’s sixth largest cross-border remittance market in 2021”.
The UAE is busy with IPOs
A second IPO underwriting process is ongoing in the UAE for presight.ai, part of the Abu Dhabi-based G42 conglomerate. (According to media reports this week, G42 has acquired a stake in ByteDance, the Chinese company behind the hugely successful digital short video portal TikTok.)
And then there was the listing of ADNOC Gas in the ADX after a blockbuster IPO. It is also the largest listing on the ADX to date.
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