IPO activities reviving on stock markets in the UAE

Equity capital markets (ECMs) have consistently been a popular way of raising funds in the United Arab Emirates, in particular via initial public offerings (IPOs).

Last year witnessed a revival of IPOs after more than five years of complete silence, with four IPOs successfully launched on the Dubai Financial Market (DFM). In addition, Gulf Marine Services Company, a UAE-based company with operations around the world, was listed on the London Stock Exchange.

Access to ECM

Generally speaking, there are a number of options available for companies to access the ECM in the UAE. The most recognizable options are:

1. Establishing a private joint stock company and listing its shares on the DFM or the Abu Dhabi Stock Exchange (ADX), after the Securities and Commodities Authority (SCA) implemented Regulation No. 10 (2014), which allows private joint stock companies to list on one of the UAE’s stock markets. Equally, existing private joint stock companies may also list their shares subsequent to the same decree;
2. Converting limited liability and private joint stock companies into public joint stock companies and offering their shares to public;
3. Establishing a greenfield public joint stock company by executing an IPO process (SCA is now more reluctant to approve this option); and
4. Dual listing of companies which are already listed on foreign or free zone stock exchanges.

Ahmed Ibrahim is a partner and head of equity capital markets at Al Tamimi & Company