Dubai Taxi Company valued at $1.26bn in oversubscribed offering

Dubai Taxi Company said it raised Dh1.2 billion (around $315 million) in the initial public offering after pricing it at the top of the range.

The final offer price was set at Dh1.85 per share, resulting in an offering size of around Dh1.2 billion for a total of 624.75 million shares, equivalent to 24.99 per cent of the company’s total issued share capital, DTC said in a statement on Wednesday following the book building and public subscription process.

Based on the final offer price, Dubai Taxi Company market capitalisation upon listing is expected to be Dh4.6 billion ($1.26bn).

It had earlier set the price range of its IPO between Dh1.80 and Dh1.85 per share.

The offering IPO drew “tremendous demand” from regional and international institutional investors as well as retail investors in the UAE.

The total demand for the offering amounted to more than Dh150 billion ($41bn), implying an oversubscription level of 130 times in aggregate, representing the “highest oversubscription level achieved by an IPO on the DFM [Dubai Financial Market]”, the company added.

The qualified investor offering was oversubscribed by close to 135 times.

“The exceptionally strong demand for the IPO, which was 130 times oversubscribed, reflects the high-quality investment opportunity provided by DTC, anchored in Dubai’s robust economic, population and tourism growth and world-leading mobility and sustainability vision,” Mansoor Alfalasi, chief executive, Dubai Taxi Company, said.

The IPO will result in total gross proceeds of around Dh1.2 billion which is being paid to the Department of Finance representing the government of Dubai, after adjusting for any expenses related to the offering, DTC added.

Following the completion of the IPO, the Department of Finance will continue to own 75.01 per cent of DTC’s share capital.

Completion of the offering and listing is expected to take place on December 7, subject to approvals.

Dubai announced plans in November 2021 to list 10 state-owned companies to increase the size of its financial market to Dh3 trillion ($816.8 billion), as well as set up a Dh2bn marketmaker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.