Dubai Investments plans IPO before year end, says CEO

• Preparations for four subsidiaries
• Interview with CEO Khalid bin Kalban
• Listings planned for DFM

Dubai Investments is preparing to sell shares in four subsidiaries to the public and may list one of them before the year end, its CEO Khalid bin Kalban has told AGBI.

The government-backed company manages AED22.1 billion ($6 billion) of assets in the UAE and beyond, in sectors including real estate, construction and building materials and education.

Investment Corporation of Dubai, the emirate’s sovereign wealth fund, is the biggest shareholder in Dubai Investments with an 11.5 percent stake.

Kalban said the company was restarting its initial public offering pipeline after a pause. “We were supposed to do [an IPO] in the second quarter, but we delayed.”

This was “not because of uncertainty”, he added, but because “opportunities have come up that make these companies even more attractive. Hopefully, we can list one before year end.”

Analysts have previously told AGBI that the declines in global stock markets since Donald Trump’s tariffs would almost certainly delay IPOs in the Gulf.

Last year there were 53 IPOs in the region. So far this year, about 40 are planned. Thirty have been announced, four have been mandated and six have been reported.

Dubai Investments itself is listed on the Dubai Financial Market and the subsidiaries’ offerings are also planned for the DFM.

Kalban declined to identify the four subsidiaries, but said they would come from Dubai Investments’ property and manufacturing portfolio.

Al Mal Capital, another Dubai Investments subsidiary, is acting as financial adviser.

Valuations for Dubai Investments’ businesses are rising, Kalban said, pointing to its wholly owned pharmaceutical manufacturing subsidiary Globalpharma. 

Dubai Investments’ internal valuation of Globalpharma suggests it could list for  $300 million, but external assessments and development plans indicate the valuation could rise to $500 million, he said.

Even then, Dubai Investments’ assets would still be undervalued, according to Kalban. “If you look at what happened in the IPOs recently, I think most of them were overvalued. We are going with the market with undervalued assets.”

Supplied/Dubai Investments

In neighbouring Saudi Arabia this year, three IPOs – Derayah Financial, Entaj and Umm Al Qura – have raised more than $1 billion between them.

Shares in all three companies rose by 30 percent on their first day of trading, the maximum allowed, though those gains have since been wiped out in the global stock market decline. 

This month Globalpharma partnered with Indian-listed ZIM Laboratories to use ZIM’s oral dispersible film technology. These are thin strips into which medication can be incorporated, which dissolve quickly in the mouth without water. They are certified for use in the European Union and can help patients with swallowing difficulties as well as children.

The pharma business, which also owns a 35 percent stake in the Dubai branch of King’s College Hospital London, has plans to expand locally and abroad, Kalban said.

Dubai Investments reported a 21 percent increase in pre-tax profit to AED1.3 billion for 2024, despite provisioning and other challenges that Kalban said reduced the bottom line by more than AED270 million compared with the year before.

First-quarter profit is already up more than 20 percent year on year, he said.

“The year ahead is very positive,” Kalban said. “The numbers should be even better than 2024.”

The company recently approved an 18 percent cash dividend and is expecting book value to rise from AED3.3-AED3.5 per share to nearly AED5 per share, Kalban said. This follows recent external valuations that added AED6 billion to the value of its portfolio.

Shares in Dubai Investments are up 4 percent so far this year.

• Dubai Investments ups stake in UK digital bank
• Dubai Investments buys 9% stake in British digital bank
• Dubai Investments buys stake in fertility company

Kalban believes the breadth of Dubai Investments’ portfolio leaves it well positioned to weather the effects of a trade war between the US and China. “If we face a drop here, we’ll gain there,” Kalban said. “We are not purely a real estate company.”

He predicts that the UAE’s real estate cycle, which began in 2022, still has at least “two to three years” of growth remaining, though the pace of growth will slow.

A shift from renting to homeownership may affect rental yields over time. “It’s still a good return, just not like before,” he said.