Overwhelming response to Dubai IPOs: Why a CEO disconnected his phone

Dubai’s business model has been highly successful, navigating through the global financial crisis of 2008-9 and then the Covid-19 pandemic.

This was reflected very well in the Dubai Electricity and Water Authority’s (Dewa) initial public offering (IPO) which was massively oversubscribed. Since the Dubai government announced that it will sell shares of its 10 public entities, local, regional and global investor interest has been tremendously high to grab a pie of the share.

The grapevine has it that Emirates airline, known as a jewel in Dubai’s crown, could be among the 10 entities that will be floated on the local stock market to boost the market cap to Dh3 trillion. Hence, every major banker and the big investor wants a share of the jewel. In order not to miss this opportunity, it seems investors have already started preparing and allocating funds aside for the auspicious day.

While speaking during an aviation summit in Manchester, UK, Sir Tim Clark, president of Emirates airline, said he had to switch off his mobile phone because of incessant calls he was getting from bankers for the IPO.

“There are very strong business models out there. I object to the notion that airlines have basket cases and never make any money. I find that extraordinarily hard to understand, especially in the case of Emirates, where we mentioned an IPO and I had to disconnect the phones and the iPhones because every banker in the world was on our door, saying ‘we’ve got investors who want to chuck money at you.’”, said Sir Tim Clark.

This proves that there will be a strong appetite for the upcoming IPOs to be launched by Dubai and will prove hugely popular among sovereign wealth funds, private funds and retail investors.

He noted that Emirates is indeed a state-owned carrier, but the government intervention is minimal and the airline is run just like a successful merchant bank.

The Emirates president last week said during the World Government Summit 2022 that Dubai’s flagship carrier will record good results for the financial year ended on March 31. He elaborated that the airline is cash-positive again and has a strong balance sheet.

— waheedabbas@khaleejtimes.com