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Delivery Hero’s Middle East unit Talabat is the latest to see its shares drop on their debut, with shares falling 6.9% to AED 1.49 yesterday, reversing earlier gains of up to 7.5%. Delivery Hero’s shares also took a hit, losing as much as 12% in Frankfurt.
REMEMBER- The company raised over USD 2 bn in the largest tech IPO this year. The IPO was priced at AED 1.60 per share, implying a market capitalization of c. AED 37.3 bn. The company sold a 20% stake after increasing the offer size from an initial 15% during the book-building period due to high investor demand.
The company’s lackluster performance is the latest in a wider trend, indicating a loss in “liquidity momentum in the IPO market” in 2024, founder and CEO of Oracle Financial Consultancy and Investments told Bloomberg. Lulu Retail also saw its shares fall flat on the first day of trading on the ADX last month, while ADNH Catering also saw a muted start on the ADX. Abu Dhabi-based edtech firm Alef Education saw its shares fall 18% on its first day of trading earlier this year.
And it’s not just the UAE: Other GCC IPOs are having similar debuts despite being oversubscribed. Oman’s OQ Exploration & Production fell 8% in its debut on the Muscat Stock Exchange two weeks ago, after raising a record USD 2 bn.
No cause for alarm? “The valuation of the business was on the higher side of global comparables,” CIO at Neovision Wealth Management Ashish Marwah said. “I would reserve an outright judgment for a few trading sessions to see if there is follow-through.” Lulu Retail’s shares have fluctuated since its debut, but is now down 5% from its debut share price. Alef Education is also down 14%.
ADVISORS- Emirates NBD Capital PSC, JPMorgan Securities and Morgan Stanley acted as joint global coordinators and joint bookrunners on the Talabat offering. Abu Dhabi Commercial Bank, Barclays, EFG-Hermes, First Abu Dhabi Bank, Goldman Sachs, ING Bank and UniCredit were joint bookrunners.
