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Alef Education shares drop 13% on first day

50 million Alef shares changed hands, making it the most active stock on Abu Dhabi’s bourse on Wednesday Shutterstock
50 million Alef shares changed hands, making it the most active stock on Abu Dhabi’s bourse on Wednesday
  • Drop from AED1.35 to 1.18
  • IPO 39 times over-subscribed
  • 150 million shares change hands

Shares in Alef Education fell 12.6 percent after the company’s Abu Dhabi bourse debut on Wednesday.

The education technology company had raised AED1.9 billion ($515 million) in an initial public offering (IPO) that was 39 times over-subscribed.

The IPO was priced at AED1.35 ($0.37) a share, the upper limit of its range. However Alef’s shares dropped to close at AED1.18 on their first day’s trading, indicating many IPO investors sought to sell at the first opportunity.

In all, 150 million Alef shares changed hands, making it the most active stock on Abu Dhabi’s bourse on Wednesday. Combined, these trades were worth AED183 million ($50 million).

Most Gulf companies that completed IPOs recently have subsequently seen their market capitalisation soar, with issuers pricing flotations adroitly to boost investor demand for their stocks after listing.

From the start of 2023 to May 23, 2024, there had been 20 Gulf IPOs that raised at least $100 million. Combined, these sold $11.2 billion of shares.

As of that date, the share prices of 18 of these companies have increased since listing, with one flat and another, Investcorp Capital, down 11 percent.

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