Burjeel Holdings raises Dh10.4 billion in IPO priced at bottom

Burjeel Holdings on Wednesday set the price for its initial public offering (IPO) at Dh2 a share anf said the IPO received strong response from the investors and over-subscribed 29 times and raising a gross total Dh32 billion.

The Abu Dhabi-based group, which completed the bookbuilding and public subscription process for its IPO on the Abu Dhabi Securities Exchange, said the offering size is confirmed at 550,729,221 ordinary shares, equivalent to 11 per cent of Burjeel’s total issued share capital. It intends to use the money to mostly pay down the company's debt.

"The final offer price for its shares has been set at Dh2, resulting in gross proceeds of approximately Dh1.1 billion," the company said in a statement on Wednesday.

Dr Shamsheer Vayalil Parambath, founder and chairman of Burjeel Holdings, said the strong demand for the IPO reflects the high-quality investment opportunity provided by Burjeel Holdings.

"The offer price reflects our desire to prioritize a supportive aftermarket performance post-listing and we are delighted that Burjeel Holdings will be one of the largest private healthcare companies on ADX once listed. The success of the offering is also due to the supportive Abu Dhabi ecosystem and will help further diversify the local capital markets,” he said.

Burjeel Holdings is set to be the first privately-owned firm to go public in the UAE this year. It operates hospitals and medical centres in the UAE and Oman and is planning an expansion into Saudi Arabia.

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Based on the final offer price, Burjeel’s market capitalisation upon listing is expected to be approximately Dh10.4 billion, making it one of the largest private healthcare companies on ADX by market capitalisation. The healthcare provider expects to make its trading debut on October 10 under the symbol 'BURJEEL'.

Upon listing on ADX, VPS Healthcare Holdings PVT LTD will continue to own a majority 70 per cent stake in the company.

Muhammad Rasoul, CEO, amana, said the success of the Burjeel IPO reiterates the region’s rise in the eye of the global markets.

"Already, we have witnessed strong trading activity across the UAE. Unlike the international markets, here we are observing a period of strong investor confidence, and most importantly innovation – indicative of the nation’s robust and consistent economic performance across public and private sectors. Safe to say, we are already looking at a record breaking year in the region for IPO performances, delivering new opportunities for investors and bucking the global trend,” Rasoul told Khaleej Times on Wednesday.

“In 2022, we have witnessed a strong start to IPOs and trading activity across the country’s indexes. In the first six months alone, IPOs in the Menaregion have raised nearly $14 billion alone- that’s an astounding year-on-year increase of over 2,952 per cent," he said.

In September 2022, International Holding Company (IHC), a diversified Abu Dhabi-based conglomerate, announced its acquisition of a 15 per cent stake in Burjeel Holdings PLC in order to scale and diversify its local and regional healthcare investments.

Dubai Islamic Bank acted as lead manager for the offering while International Securities acted as financial adviser. JPMorgan Securities was the capital markets adviser.

Key takeaways

• Burjeel Holdings IPO received strong demand and oversubscribed 29 times

• Burjeel Holdings confirms the final offer price for its shares has been set at Dh2.00, resulting in gross proceeds of approximately Dh1.1 billion following strong demand from local retail and professional investors

• Total gross demand for the Offering amounted to over Dh32 billion, implying an oversubscription level of 29 times in aggregate

• Trading on ADX is due to commence on October 10, 2022 with a market capitalisation of Dh10.4 billion at time of listing

• Burjeel Holdings will be one of the largest private healthcare companies on ADX by market capitalisation at time of listing

• The IPO brings a growth-focused opportunity to ADX bolstering Abu Dhabi's growing and dynamic equity capital market ecosystem

— muzaffarrizvi@khaleejtimes.com

• Abu Dhabi