Abu Dhabi IPO Fund plans up to four listings by 2024-end

WAM

Abu Dhabi can expect up to four further listings of private companies by the end of 2024, according to Bassel Khawaja, advisory head of the Abu Dhabi IPO Fund.

Speaking on the sidelines of Abu Dhabi Finance Week (ADFW), Khawaja told AGBI the fund is currently assisting three unnamed companies with their IPO readiness. 

He said the companies were in the technology, foreign exchange and remittance and hospitality sectors. The future pipeline includes companies in real estate and the industrial sector.

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Khawaja said he expected the government’s “privatisation program” to continue, followed by a push from the private sector to list on the Abu Dhabi Securities Exchange (ADX).

Listings on the ADX witnessed the highest proceeds in the first nine months of the year with $3.7 billion, according to data from Kuwait Financial Centre (Markaz).

State-owned Abu Dhabi National Oil Company’s gas business, Adnoc Gas, raised $2.5 billion in proceeds in March marking the largest IPO on ADX and surpassing Borouge, majority-owned by Adnoc, which raised $2 billion in June 2022.

“We’ve had the government sell its assets from the oil and gas companies. In my perspective that’s going to continue as an initial wave and then once that has gone then you’ll get the second wave which is the private companies that we’re busy dealing with,” Khawaja said.

The AED5 billion ($1.36 billion) IPO Fund, was launched in 2021 by the emirate’s Supreme Council for Financial and Economic Affairs, with a target to advise and invest in private companies and family businesses. It helps by subsidising the IPO readiness fees involved.

The fund’s focus is on entities with a target ticket size of between 10 and 20 percent of the float.

In the first three quarters of 2023, there were 968 IPOs globally, with $101.2 billion in capital raised, a 5 percent and 32 percent decrease year-over-year respectively, according to the EY Global IPO Trends Q3 2023 report.

Emerging markets made up 77 percent of the global share by number and 75 percent by proceeds.

“Abu Dhabi has restructured the framework to  make it a lot more investor friendly,” said Khawaja.

“You will see a nice, staggered approach of IPOs in 2024, 2025 and so on.”

He added that “we will see Fortune 500 companies in the next decade that started off in this part of the world and in Abu Dhabi specifically”.

The Fortune Global 500, also known as Global 500, is an annual ranking of the top 500 corporations worldwide in terms of revenue, which is compiled by Fortune magazine. 

“There are tremendous companies that are large enough to be big players not just regionally but on a global scale,” he said.