Modern architecture, Dubai central business district and car traffic are seen from Sky Views Observatory on Dec. 13, 2023 in Dubai, United Arab Emirates.
Dominika Zarzycka | SOPA Images | LightRocket
DUBAI, United Arab Emirates — Shares of Dubai parking operator Parkin surged more than 30% Thursday as the company went public on the Dubai Financial Market.
Parkin’s price per share jumped to 2.73 dirhams ($0.74) as trading began, marking an overwhelmingly positive debut for the United Arab Emirates’ first public listing of the year. Shares were initially priced at the top end of their range at 2.1 dirhams, giving the company a valuation of $1.7 billion.
Raising 1.57 billion dirhams ($429 million) for its IPO, Parkin was oversubscribed by 165 times, seeing demand of 259 billion dirhams — a record for the exchange.
Parkin is the largest provider of paid parking in Dubai, and is set to see further demand as the city’s population climbs. The expat hub in the first half of 2023 saw a 63% increase in residency visas issued compared to the same period a year prior.
“There are clear indications that Dubai is on a growth trajectory, and Parkin is an integral part of the city of Dubai. So as Dubai grows, it’s only natural that Parkin grows as well,” Parkin Chairman Ahmed Hashem Bahrozyan told CNBC’s Dan Murphy shortly after trading began on Thursday.
Dubai paid parking provider Parkin goes public on the Dubai Financial Market Exchange on March 21, 2024 in Dubai, United Arab Emirates.
CNBC
Parkin’s owner, the Dubai Investment Fund, offered a 25% stake in its listing of the company and demand from state institutions and families has been high, suggesting a robust appetite for Gulf investment.
Parkin is offering a dividend of 100% of profit or free cash flow to equity, whichever is higher, “subject to distributable reserves requirements,” according to its prospectus.
Asked if the company would be able to maintain such a level of payouts going forward, Bahrozyan said: “We are very confident we can, as I said the level of growth in the city promises that we will grow. And we do have very comprehensive and very powerful plans for expansion … We promise that we will do our best to maximize the value for all the shareholders.”
Parkin’s float follows a relatively quiet period for listings in Dubai, after a marathon year of public offerings in 2022 that saw many of the emirate’s major public utilities and critical infrastructure operators go public.
Those included Dubai power and water utility DEWA — the city’s largest-ever IPO raising 22.3 billion dirhams in April 2022 — as well as toll operator Salik, district cooling services provider Empower, and Dubai Taxi.
Parkin is the sixth firm to IPO under Dubai’s public listing drive, which started in 2021. The city is seeking to improve liquidity and volume on its local bourses to better compete with regional counterparts in Abu Dhabi and Riyadh.
The Gulf more broadly has seen a stream of IPOs, with the large majority in Saudi Arabia. In 2023, 35 Saudi companies were publicly listed, along with eight in the UAE, two in Oman, and one in Qatar.
“I think we’re still within that spree of IPO bonanza, but it’s a healthy one,” Fadi Arbid, founding partner and CIO of Dubai-based investment manager Amwal Capital Partners, told CNBC.
“In Dubai it’s a very deliberate effort from the government to privatize some trophy assets, and then open them to the public and to investors globally. And Saudi Arabia is equally driven by the private sector and the government as well.”
He added that IPOs in Saudi Arabia have the advantage of being “backed by a deep retail market.”
“It’s still a healthy pipeline,” Arbid said. “It’s all about the pricing now.”
