Talabat food delivery service prepares for Dubai IPO

Talabat

• Parent Delivery Hero to keep majority stake
• Sales in Mena up by almost a third
• Listing continues buoyant year for IPOs

The food delivery company Talabat is to list on the Dubai Financial Market this year, 20 years after it was founded.

The business, which operates in eight countries across the Middle East and North Africa, will pursue an initial public offering in the fourth quarter, according to a filing on the Frankfurt Stock Exchange from its parent company, Delivery Hero.

It said the listing would be carried out through a secondary sale of shares, with Delivery Hero retaining a majority interest in the company, which was launched in Kuwait in 2004.

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Food delivery companies in the Mena region doubled their net profit in 2023 generating $680 million, a 120 percent year on year increase, according to Teaser Research Company.

In 2023, Talabat’s gross merchandise value, which measures the total value of goods sold on a platform or marketplace over a specific period of time, reached €5 billion ($5.57 billion).

Talabat’s sales in the Middle East and North Africa region were up by almost a third in the second quarter, ahead of other regions, a statement issued after the IPO announcement said.

Vijay Valecha, chief investment officer at Century Financial said he expected demand for a Talabat IPO to be “extremely high”.

Indian food delivery platform Zomato launched an IPO in 2021. At that time the food delivery industry in India was valued around $4.95 billion. 

Zomato’s IPO was priced at INR76 and surged to INR126 the next day, marking a 66 percent gain. Currently, Zomato’s stock is priced at INR251.

“Zomato’s IPO set a precedent for the food delivery sector, influencing companies like Jubilant Foodworks and restaurant operators like Devyani International, Westlife Foodworld, and Barbeque-Nation Hospitality,” said Valecha.

• Delivery Hero reports Mena revenue surge

• Cashless economy is at the door, says food delivery boss
• Healthcare sector props up Gulf IPOs in 2024

“This trend may extend to the UAE, reflecting broader market changes. Furthermore, the recent shift in US monetary policy, with lower interest rates, boosts company valuations, allowing firms to capitalise on this to raise capital and expand operations.”

It has been a buoyant year so far in the Gulf for IPOs, with 14 deals worth a total of $2.64 billion struck in the healthcare, education and technology sectors.

The number of IPOs rose only slightly year on year, from 13 listings in the second quarter of 2023, but proceeds for the quarter leapt by 45 percent compared with the previous year.

The UAE’s two IPOs contributed a third of the region’s overall proceeds. The academic and education services provider Alef Education Consultancy listed on the Abu Dhabi Securities Exchange and raised $515 million, while the listing of the family-owned supermarket business Spinneys raised $375 million on the Dubai Financial Market.

Earlier this week, NMDC Energy, an engineering, procurement, and construction contractor for energy projects, announced plans to list on the Abu Dhabi Securities Exchange (ADX).

The company, a subsidiary of NMDC Group, expects to raise AED3.22 billion ($877 million) from the IPO.