Talabat Holding Shares Drop After Initial Rise on First Day of Trading on Dubai Stock Exchange

Talabat Holding Shares Drop After Initial Rise on First Day of Trading on Dubai Stock Exchange

Shares of food delivery platform Talabat Holding started strong but fell 5% on their first day of trading on the Dubai Financial Market (DFM) on Tuesday. This happened after the company raised $2 billion in the largest IPO in the Gulf region this year.

Talabat Shares Drop

Talabat’s shares fell 5% to $0.41 (AED 1.52) at around 1:21 pm AST on Tuesday. They had opened at $0.46 (AED 1.7), which was above the IPO price of $0.44 (AED 1.6), but dropped to $0.41 (AED 1.5) later in the day.

In the first few minutes of trading, over 239 million shares were traded, worth more than $110.8 million (AED 407 million), according to reports.

EFG Hermes, which helped manage the $2 billion IPO, said it was the biggest IPO in the UAE this year and the largest global tech IPO so far.

The IPO offered 20% of Talabat’s shares in its MENA holding company, with Berlin-based Delivery Hero behind the company. Talabat increased the share offering from 15% to 20% due to strong demand from investors.

Dividend Plans

Talabat Holding plans to pay a minimum dividend of $100 million (AED 367.3 million) in April 2025, based on the company’s results for the fourth quarter of 2024.

It also plans to pay at least $399.9 million (AED 1.5 billion) in two payments for the year ending December 31, 2025—one in October 2025 and the other in April 2026.

Regional IPO Activity

Talabat’s IPO is part of a larger trend of IPOs in the Middle East, which have raised nearly $11 billion this year, according to Bloomberg.

In November, supermarket chain Lulu Retail raised $1.7 billion in a very popular IPO, with EFG Hermes also managing that offering.

Karim Meleka, Co-Head of Investment Banking at EFG Hermes, said that the success of Talabat and Lulu Retail’s IPOs shows growing investor interest in the technology and retail sectors in the MENA region. He also highlighted EFG Hermes’ role as a trusted partner in major regional transactions.

Talabat’s IPO brings EFG Hermes’ total to nine IPOs in the GCC this year, including three on the Dubai Financial Market and two on the Abu Dhabi Stock Exchange.

Published: 10th December 2024

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