-
Parkin Co. PJSC witnessed robust demand for its $429 million Dubai initial public offering, with orders reaching a staggering $71 billion, showcasing the persistent appetite for share sales in the Gulf region. The IPO, centered around the city's parking business, received overwhelming interest, garnering 165 times the coverage. Setting the final price at 2.10 dirhams per share, the top end of the marketed range, valued Parkin at $1.7 billion, with the Dubai Investment Fund selling 749.7 million shares, equivalent to a 25% stake in the IPO. This successful listing adds to the trend of Gulf IPOs attracting significant demand, fueled by investors seeking attractive dividends and the potential for strong share price performance.
- The UAE and Saudi Arabia, in particular, have embarked on a spree of listings to diversify their economies away from fossil fuels. Parkin's IPO, the sixth privatization by the Dubai government, aligns with a broader plan unveiled in late 2021 to list 10 state-owned companies, aimed at enhancing trading volumes and mirroring similar initiatives in Abu Dhabi and Riyadh. With plans to commence trading on March 21, Parkin aims to offer a minimum dividend of either 100% of profit or free cash flow to equity for the full 2024 fiscal year. Emirates NBD Capital, Goldman Sachs Group Inc., and HSBC Holdings Plc serve as joint global coordinators for the IPO, with Rothschild & Co. acting as an independent financial adviser.
Why it matters
Positioning its IPO as a wager on Dubai's expanding population, Parkin anticipates a surge in demand for public parking, fueled by factors such as expatriates relocating to the emirate and changes in residency regulations. The company forecasts a 60% growth in demand for public parking by 2033.
