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IPO juggernaut Bayanat eyes driverless vehicle acquisitions

Bayanat AI valued its stake at over $170 million after a hugely successful flotation this week Reuters
Bayanat AI recorded the best first-day performance of any global stock market listing of at least $100 million in 2022 so far
  • Next stage of growth for Abu Dhabi firm is autonomous vehicles
  • Bayanat started trialling driverless taxis last year
  • Also looking to acquire smart city concepts and sustainability solutions

Abu Dhabi’s geospatial and data analytics firm Bayanat AI Plc expects its next wave of growth to come from the driverless vehicles segment and is in the market for potential acquisitions.

The company this week recorded the best first-day performance of any global stock market listing of at least $100 million this year.

It nearly quadrupled in its debut on the Abu Dhabi Securities Exchange (ADX), after raising $171 million in an initial public offering (IPO).

Shares in the firm, owned by Abu Dhabi’s G42, surged 309 percent to an intraday high of AED4.50 ($1.22), settling 272 percent above the listing price at AED4.10 at the close of trading on Monday.

The price of the offering was set at AED1.10 per ordinary share.

“Most of our growth is going to come from our existing contracts,” Renyl Rauf, CFO at Bayanat AI, told AGBI.

“We have recurring revenue streams set up. The next level of growth is going to come from autonomous vehicles.”

Bayanat last year started trials in Abu Dhabi for TXAI, the Middle East’s first driverless ride-sharing service.

“We started this off as a pilot project on Yas Island and Saadiyat Island,” Rauf said.

“Now we are at a stage where we are making the next phase of it, where you will see a lot more vehicles and land transport modes.

“It’s going to be an exciting phase where we will leapfrog all of Abu Dhabi and the UAE into the next level of unmanned transport by taking away the dependency on humankind. A lot of our growth will come from that segment.”

Bayanat provides services in geospatial intelligence around data generation and acquisition, data as a service, earth observation, mobility as a service and big data.

The company also provides decision support services in artificial intelligence.

Bayanat’s core markets include defence and national security, smart cities, energy and resources, transportation, environment and real estate.

The company also plans to acquire “technology or providers of technology” that can complement or add to its portfolio of products and services, Rauf said.

Acquisitions of interest include system integrators, smart city concepts, and solutions in sustainability, defence and national security, smart mobility and autonomous vehicles.

“All the money will be used for inorganic and organic expansion, and to improve our processes,” Rauf added.

He said that the company will also expand to other markets “close to region”.

Bayanat reported revenue of AED490.6 million and profit of AED225.9 million ($61.2 million) for the nine months to September.

After the IPO, Bayanat became the first and only listed geospatial intelligence company in the Middle East and North Africa (Mena) region.

Major cornerstone investors 

Of the total share of the Bayanat offering, 93.5 percent were available to professional investors and 6.5 percent to retail investors.

Private equity company Silver Lake — which manages more than $92 billion in combined assets and has snapped up stakes in some of the world’s best-known tech firms including Airbnb, Expedia, and Twitter — is a cornerstone investor in Bayanat and bought a stake in G42 last year.

“This IPO is the first time Silver Lake has actually participated in an IPO on the ADX, which is a strong indicator for Bayanat and the market as a whole,” Rauf said.

Bayanat was formed in 2008, out of the commercialisation of the UAE’s Military Survey Department, a sector of the Armed Forces set up in 1974.

G42 acquired Bayanat in 2020. In the same year, Mubadala also took an undisclosed stake in G42, which is chaired by the UAE’s national security adviser Sheikh Tahnoon Bin Zayed.

The flotation comes as the Gulf continues to be a rare bright spot in the global IPO picture, riding high on oil prices and a relative meagreness of IPOs in other markets.

Globally, there have been a total of 992 IPOs, raising $146 billion, a 44 percent and 57 percent decrease year-on-year, respectively, as companies and investors continue to face mounting macroeconomic challenges, market uncertainties, increasing volatility and falling global equity prices.

Surge in listings

According to the latest EY Mena IPO Eye report, the Mena region witnessed a 288 percent year-on-year increase in the number of companies listing between January and September, raising $14.7 billion in total – up 550 percent on the same period last year.

Governments of Abu Dhabi, Dubai and Saudi Arabia are continuing to push state-led listing programmes. 

The Abu Dhabi Securities Exchange’s (ADX) market capitalisation opened above AED2 trillion ($545 billion) in June for the first time in its history, marking a milestone that has made the region’s youngest exchange the second largest in the Middle East within only two decades.

According to the Arab Monetary Fund (AMF), the UAE capital’s bourse recorded the highest increase in trading value among Arab financial markets in May 2022 at 292.64 percent.

The flurry of IPOs contributing to the rise in ADX’s market cap in the last few quarters include Abu Dhabi Ports, Fertiglobe, Adnoc Drilling, Alpha Dhabi and Multiply Group.

IPOs of five Abu Dhabi government-controlled companies – Adnoc Drilling Co, urea and ammonia maker Fertiglobe, Al Yah Satellite Communication Co (Yahsat), Abu Dhabi Ports and petrochemicals manufacturer Borouge – raised a combined $5.73 billion.

The exchange’s market cap crossed the AED2 trillion mark following the completion of Borouge’s IPO, the largest-ever listing on ADX and the biggest for a petrochemical company in the Middle East.

Last month, healthcare major Burjeel Holdings raised more than $300 million from its IPO on the ADX.

On Wednesday, Americana Restaurants, the Middle East and North Africa franchisee of fast-food restaurants KFC and Pizza Hut, said it planned to launch an IPO, followed by a dual listing in the United Arab Emirates and Saudi Arabia.

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