Al Ansari Financial Services’ IPO Price Range Is Set At Dh1-Dh1.03

Al Ansari Financial Services, which includes the UAE’s leading remittance provider Al Ansari Exchange, has launched an IPO today (March 16) with a price range of Dh1-Dh1.03 per share. This is a significant step because it is the first of many family-owned UAE businesses that plan to list on DFM or ADX.

The IPO will offer 750 million shares to investors, with the final price to be announced on March 27. National Bonds Corporation will be a ‘cornerstone’ investor, committing Dh200 million and valuing the company between Dh7.5 billion and Dh7.725 billion. The price range was communicated via a newspaper advertisement.

To raise capital, Al Ansari Financial Services has launched an initial public offering (IPO), with the subscription period running until March 24. Retail and institutional investors will be offered 10% of the Dubai-based company in the float.

The company’s medium-term strategy entails expanding its current presence in the UAE while also looking for strategic opportunities in other Gulf markets.

CEO Rasheed Al Ansari reveals 41 branch openings in recent years, with 60% becoming profitable in the first month

During a recent media briefing, CEO Rasheed Al Ansari emphasized the importance of branch numbers in terms of market share. He revealed that the company opened 41 branches in the last few years, with 60% of them becoming profitable within the first month of operation.

This is a significant achievement for the company and a testament to its growth strategy. The expansion of the company’s branch network is expected to drive market share growth, especially given the strong correlation between the two metrics.

According to CEO Rasheed Al Ansari, the demand for physical branches from customers is significant, indicating a desire to interact with the company in person.

As a result, Al Ansari Financial Services plans to expand its branch network to meet this demand, with a target of opening 60 new branches in the coming quarters.

The company is committed to satisfying the needs of the market by investing the necessary energy and resources into this expansion.

National Bonds Corporation has also pledged AED 200 million (equivalent to $54.5 million) as a cornerstone investor in the IPO. This investment from National Bonds Corporation is expected to strengthen Al Ansari Financial Services’ market position and demonstrate investors’ confidence in the company’s future prospects.

Overall, Al Ansari Financial Services’ strategy of expanding its branch network and attracting cornerstone investors should position the company well for long-term success in the UAE and wider Gulf markets.

Beyond its physical branch network, Al Ansari Financial Services intends to broaden its services in two ways. To begin, the company plans to expand its digital offerings, as remittance flows in the Gulf are already seeing significant transaction volume via online and app-based channels.

Second, the company intends to strengthen its value proposition in the higher-margin corporate remittance space, which is an important component of the UAE and Gulf markets. Al Ansari Financial Services, as a market leader, has the potential to achieve significant growth in this area over the next few years.

According to a market analyst, the company’s ability to quickly expand into other Gulf markets will be a key factor in determining its post-IPO success.

Overall, Al Ansari Financial Services’ strategy of improving digital offerings and expanding its presence in the corporate remittance space could position the company for significant growth in the coming years.

Al Ansari Financial Services’ IPO price range of Dh1-Dh1.03 per share values the company at a 12-12.5x earnings multiple. According to Sameer Lakhani, Managing Director at Global Capital Partners, this pricing is competitive when compared to regional and international benchmarks.

Al Ansari is the UAE’s first ‘pure-play’ family IPO, which may encourage other privately-held companies to raise capital in the domestic financial markets for future growth.

Lakhani anticipates an increase in the number of family-owned businesses pursuing initial public offerings (IPOs) in the coming year, as the emphasis on capital markets and equity capital grows.

The attractive pricing and successful IPO of Al Ansari Financial Services could have a positive impact on the wider UAE financial markets and encourage other family-owned businesses to consider IPOs as a viable option for raising capital.

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Al Ansari Financial Services, which began operations in Kuwait in 2002, will soon acquire full ownership. In 2021, the company will have a strong presence in the world’s sixth-largest outward personal remittances market.

Meanwhile, the UAE is seeing a surge in IPOs, including presight.ai, an Abu Dhabi-based G42 subsidiary, and ADNOC Gas, the largest listing on the ADX to date. G42 is also said to have invested in ByteDance, the Chinese company behind TikTok.

Due to the ongoing global impact of the Silicon Valley Bank’s collapse and fluctuations in Credit Suisse’s stock price, investor sentiment on the ADX and DFM appears subdued.

The UAE and Gulf stocks, on the other hand, are largely immune to the SVB fallout, with Bahrain’s GFH reporting minimal exposure.

This may cause investors to focus on local and regional stock options, such as Al Ansari, which is expected to pay a sizable dividend and have room for growth in its core remittance business.