UAE hospital operator Burjeel in share surge on $300m IPO debut

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• The healthcare specialist offered 11% of its shares on the ADX
• The listing implied a market capitalisation of $2.8 million
• Proceeds from Middle Eastern IPOs are rising, bucking the global trend
• Shares surged 15.5% on first day of trading on Abu Dhabi bourse

Healthcare major Burjeel Holdings raised more than $300 million from its IPO on Monday, it has said.

The company, which offered 11 percent of its share capital on the Abu Dhabi Securities Exchange (ADX), attracted demand of more than $8.7 billion as the Middle East continues to be a rare bright spot in the global IPO picture.

So far this year, the region has recorded a 209 percent increase in proceeds, despite a 51 percent decrease in the number of deals, according to EY.

The consultancy firm said there had been 992 IPOs worldwide in 2022 and these offerings had raised $146bn in total. Both figures have decreased year-on-year, by 44 percent and 57 percent respectively. 

• UAE health firm Burjeel to offer 11% stake in October IPO
• Abu Dhabi’s IHC acquires 15% stake in Burjeel Holdings
• Abu Dhabi bourse tops Arab region in market value increase

IPO companies and investors are facing with mounting macroeconomic challenges, market volatility and falling global equity prices. 

But Burjeel reported that its offering was 29 times oversubscribed in aggregate. Its shares were priced at $0.54, implying a market capitalisation of $2.8bn at the time of listing. 

Shares rose 15.5 percent to about $0.63 on the first day of trading.

Founded in 2007 with the opening of LLH Hospital in Abu Dhabi, the company intends to pay cash dividends from 2023 onwards.

Today Burjeel operates 61 facilities, including 16 hospitals and 23 medical centres, in the UAE and Oman. It is about to expand into Saudi Arabia. 

Dr Shamsheer Vayalil Parambath, Burjeel’s founder and chairman, said: “Our IPO demonstrates our commitment to helping grow the UAE’s capital markets ecosystem through expanding the UAE economy and private sector, further cementing Abu Dhabi’s role as an attractive destination for investment.”

On listing, VPS Healthcare Holdings continues to own a majority 70 percent stake in the company. In September, International Holding Company acquired a 15 percent stake.

According to EY, the Middle East and North Africa witnessed a 500 percent year-on-year increase in the number of companies listing during the first six months of 2022, with 24 IPOs raising $13.5 bn.

In the UAE, Dubai Electricity and Water Authority raised more than $6bn, becoming the biggest IPO in Europe, the Middle East and Africa since 2019. It was also the largest IPO to date in the UAE, with the order book oversubscribed by 37 times. 

Real estate developer TECOM Group raised $454m. It was more than 21 times oversubscribed.