Dubai’s TECOM Group Expected to Raise $455 Mln in IPO

Dubai’s TECOM Group Expected to Raise $455 Mln in IPO

Dubai business park operator TECOM Group set price guidance on Thursday for its initial public offering that showed it could raise up to 1.67 billion dirhams ($454.7 million) in the listing.

TECOM Group, owned by the investment vehicle of Dubai's ruler, plans to sell 625 million shares, or 12.5% of issued share capital, at a price range of 2.46 dirhams ($0.66) and 2.67 dirhams ($0.72) per share.

That implies a market capitalization of between 12.3 billion dirhams ($3.3 billion) and 13.4 billion dirhams ($32.6 billion), said the group, which operates 10 business parks and districts across the emirate of Dubai.

UAE Strategic Investment Fund and Shamal Holding will be “cornerstone” investors in the listing, with a combined commitment of 283.75 million dirhams ($77.2 million).

The company is also offering an attractive dividend yield of between 6% and 6.5%, based on a dividend payout of 800 million dirhams ($217.7 million), higher than water and electricity utility DEWA.

On July 5, TECOM will be the latest firm to go public on the Dubai stock market, known as the DFM, under a government initiative announced in November to list 10 state-linked companies.

The IPO subscription period started on June 16 and runs until June 23 for the UAE retail