Alef Education, an Abu Dhabi-based edtech firm, on Monday announced its intention to float 20% of its share capital in an initial public offering (IPO), and thereafter list its shares on ADX.

All the 1.4 billion shares to be offered are held by Tech Nova Investment – Sole Proprietorship L.L.C and Kryptonite Investments L.L.C.

Alef Education is indirectly owned by Abu Dhabi Capital Group, a private institutional investment group.

The first tranche for individual investors, comprising 8% of the total sale, is expected to run from 28 May to 4 June 2024. The second tranche for professional investors, comprising 92%, will run from 28 May to 5 June 2024.

The price range for the offer will be announced on May 28, with the final price set on June 6, the company said in a statement.

Alef Education provides AI-powered and personalised learning solutions and digital education across grades K-12 for schools across the UAE and other markets worldwide, like Indonesia, and the US.

Alef expects to pay a minimum dividend payout ratio of 90% of the net profit generated for both financial years 2024 and 2025.

The group had revenues of AED 750 million ($204 million) in the financial year ended 31 December 2023, a 12.4% increase from AED 667 million in 2021.

The offering has been certified as shariah-compliant by First Abu Dhabi Bank PJSC, which is also the listing advisor.

The platform has approximately 1.1 million registered students, 50,000 teachers and 7,000 schools as of 2023.

First Abu Dhabi Bank PJSC, and EFG Hermes UAE Limited are joint lead managers and joint bookrunners.

In a press conference following the IPO announcement,  Alef Education’s CEO Geoffrey Alphonso said the company has a “robust” M&A pipeline, with “one to two” announcements expected before year-end to fuel its inorganic growth. 

“We are looking at companies that have potential capabilities that we do not have that will travel well to expand either an existing contract or into the B2B sector into different school groups,” he told Zawya. 

Amit Choudhary, CFO of Alef Education added the company currently has a debt free capital structure, "which unlocks the door to raising capital in the form of debt to be able to pursue some of these M&A opportunities.”

(Reporting by Brinda Darasha and Bindu Rai; editing by Seban Scaria)