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Dubai Taxi Company (DTC) will offer 624.75 million shares, or 24.99% of its capital, in an IPO as the Dubai government announced its intention to float its transport unit.
The price range will be announced on November 21 following a book building process, the company said in a statement on Monday.
The subscription period will open on November 21 and end on November 28 for the UAE retail investors and November 29 for professional investors. Admission of shares to trading on the Dubai Financial Market is expected to take place in December 2023.
The selling shareholder, the Department of Finance for the Government of Dubai, could amend the size of the offering or the tranche, DTC added.
Emirates NBD Bank PJSC has confirmed that the offering is compliant with Shariah principles.
Emirates Investment Authority and the Pensions and Social Security Fund of Local Military Personnel will be cornerstone investors with 5% investment each.
Beginning from 2024, DTC intends to pay dividends twice each year in April and October with a first dividend of at least 71 million dirhams ($19.3 million) to be paid in April 2024.
Rothschild & Co Middle East Limited has been appointed as the independent financial advisor (IFA). Citigroup Global Markets Limited, Emirates NBD Capital PSC and Merrill Lynch International have been appointed as joint global coordinators and joint bookrunners.
EFG-Hermes UAE Limited (acting in conjunction with EFG Hermes UAE LLC) and First Abu Dhabi Bank PJSC have been appointed as joint bookrunners.
DTC is currently Dubai’s main taxi operator (with 44% market share in Dubai in terms of taxi fleet as of June 2023) and is also active in other mobility business lines, specifically buses, limousines, and delivery bikes.
For the nine months ended 30 September 2023, DTC recorded revenue growth of 11.1% compared to the same period in 2022, EBITDA margin of 25.5% and net income margin of 18.9%
The DTC IPO will be the first share sale by the government in more than 12 months, after it sold stakes in four state-backed companies last year.
(Reporting by Brinda Darasha; editing by Seban Scaria)
