Dubai Taxi IPO: Shares, prices, dividends, who can buy; all your questions answered

Dubai Taxi Company (DTC) has become the latest government entity to announce a plan to launch an initial public offering (IPO). A law announced on Sunday recognises the transport solutions provider as a public joint-stock company with financial and administrative independence.

Here are all your questions answered according to details available in the DTC’s ‘intention to float’ document:

How many shares will be made available?

Over 624.75 million shares with a nominal value of Dh0.04 each will be made available in the offering. This represents 24.99 per cent of DTC’s total issued share capital.

The share capital of the company has been set at Dh100 million divided into 2.5 billion shares paid in full. These shares are existing ones held by the Department of Finance for the Government of Dubai as the selling shareholder.

The size of the offering and each tranche size can be amended any time prior to the end of the subscription period, subject to applicable laws and relevant approvals.

Who can buy the shares?

- UAE retail offering will be made available to retail and other investors within the country.

- An offering will be available for professional and other investors in a number of countries outside the US.

- 5 per cent of the offering will be reserved for the Emirates Investment Authority.

- 5 per cent will be reserved for the Pensions and Social Security Fund of Local Military Personnel.

When is the subscription period?

The UAE retail offering subscription period is expected to run from November 21-28. The qualified investor offering period is from November 21-29.

When will the shares be traded?

The completion of the offering and admission is expected to take place in December 2023. This includes approval of admission to listing and trading on the Dubai Financial Market.

Is the offering Sharia-compliant?

According to the Internal Sharia Supervision Committee of Emirates NBD Bank, the offering is compliant with Sharia principles. Investors have been advised to undertake their own “due diligence” to ensure that the offering is compliant with Islamic laws.

When and how will the dividends be paid?

Starting from the fiscal year 2024, the company intends to pay dividends twice each year in April and October. In addition, and in respect of the financial performance of the fourth quarter of 2023, the company expects to distribute a first dividend of “at least” Dh71 million to be paid in April 2024. For the fiscal year 2024 and the years thereafter, an earnings-linked framework with a minimum of 85 per cent of annual net profit will be made available for distribution for the relevant period.

Who will implement the offering?

>> Independent financial advisor: Rothschild & Co Middle East Limited.

>> Joint global coordinators and joint bookrunners: Citigroup Global Markets Limited, Emirates NBD Capital PSC and Merrill Lynch International.

>> Joint bookrunners: EFG-Hermes UAE Limited and First Abu Dhabi Bank PJSC.

>> Lead receiving bank: Emirates NBD Bank.

>> Other receiving banks: Abu Dhabi Islamic Bank, Ajman Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank and Mashreq Bank.

What you need to know about Dubai Taxi Company

It is currently the number one taxi operator in Dubai, with 44 per cent market share (as on June 30, 2023). Established as a taxi company in 1994, the company has since expanded to other mobility businesses, including limousine; bus (school and commercial); and last-mile delivery via delivery bikes services.

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