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Alpha Data, a UAE-based technology services company which sold a 40% stake in an Abu Dhabi IPO to raise 600 million dirhams ($163 million), saw its shares climb nearly 7% on debut on Tuesday. The broader market fell 0.17%.
Alpha Data opened at AED 1.53 and oscillated between an intraday low of AED1.51 and an intraday high of AED 1.70. It closed at AED 1.60, signalling an intraday gain of 6.67%.
“The solid opening indicates robust underlying demand and positive market sentiment toward the company’s fundamentals and prospects,” said Vijay Valecha, Chief Investment Officer at Century Financial.
The company has a market capitalization of AED1.6 billion or $408 million.
The IPO, the year's first in the UAE, attracted substantial interest from both domestic and international investors, and resulted in double-digit oversubscription levels.
“This is attributable to a plethora of factors. For starters, Alpha Data operates in the high-growth digital infrastructure and tech sector – which is an area of interest for most investors. Additionally, the company’s recurring revenue model, strong presence in the tech sector, and alignment with the government’s digital transformation agenda have made it a compelling investment for investors."
The company has said it expects to distribute a dividend of AED130 million in 2025, a yield of 8.7%.
“Alpha Data’s dividend yield is expected to reach 8.7%, positioning it among the highest offered by listed companies in the UAE,” said Valecha.
Yield-seeking investors will be inclined to invest in such a company, particularly since this high-growth sector is not known for paying attractive dividends to shareholders, he added.
“If the company maintains this payout policy, it could appeal to both growth and income-oriented investors—offering an appealing combination of capital appreciation potential and steady yield,” Valecha added.
(Reporting by Brinda Darasha; editing by Seban Scaria)
