The Mena region saw four IPOs raise total proceeds of $ 425.8 million in the first half (S1) of 2021, a 48% drop in proceeds from the same period in 2020, said professional services firm EY in a new report.
The number of registrations has remained the same year over year, according to EY Mena IPO Eye Q2 2021 report
The year 2021 started off with a slow start after a slight increase in issuance in the fourth quarter of 2020. After the three listed IPOs in the first quarter of 2021, the second quarter of 2021 saw only one Mena IPO, Taaleem Management Services, which has been listed on EGX and raised. $ 131.0 million in revenue. The issuance was a slight improvement over the second quarter of 2020, when there was no public offering, as the Covid-19 pandemic affected the global economy and created uncertainty for businesses.
Globally, traditional IPOs’ performance remained strong after enjoying a wave of momentum starting in the first quarter of 2021, with 597 IPOs generating total proceeds of $ 111.6 billion. This was 206% and 166% more respectively than in the second quarter of 2020 in terms of number of transactions and products and was the second most active quarter in terms of number of transactions and products over the past years. Last 20 years. The previous record was set in the second quarter of 2007, when 522 IPOs raised $ 87.6 billion.
Matthew Benson, Head of Strategy and Transactions at EY Mena, said: âThe Mena region IPO market did not experience a rebound in activity in the second quarter, with just one IPO. on the EGX stock exchange, while direct listings continued to gain momentum with six listings in several MENA countries. Compared to the first half of 2020, although the number of IPOs remained at four offers during the first half of 2021, the total raised proceeds decreased by 48%.
âPreparations are underway for several key deals expected to take place in the second half of this year, particularly with the United Arab Emirates and Saudi Arabia demonstrating a strong pipeline of IPO candidates. Our outlook for the region’s IPO activity remains positive, given the continued improvement in economic conditions and stability in the region, coupled with the strong oil price performance we have seen so far. now in 2021. “
United Arab Emirates: potential IPOs on ADX
In the United Arab Emirates, the Abu Dhabi Securities Exchange (ADX) is currently preparing for several IPOs. The Abu Dhabi National Oil Company (Adnoc) and OCI are considering listing their Fertiglobe joint venture. Adnoc also announced the sale of a minority stake in its drilling unit as part of an IPO valued at $ 10 billion.
Mubadala Investment Company-owned satellite operator Al Yah Satellite Communications completed its IPO on ADX in the third quarter of 2021 and raised $ 731 million. In Dubai, capital markets suffered another setback when the early IPO of logistics company Tristar Transport was canceled after its public sale of shares began in early April. The company planned to offer 24% of its shares on the DFM at an implied valuation of up to $ 882 million.
Mena SPAC’s activity increases as companies explore alternatives to public listings
Notably, the report shows an increase in Special Purpose Acquisition Company (SPAC) activity from Mena-based companies exploring alternative avenues to public listing. Mena companies have traditionally struggled to access U.S. markets through the official IPO channel, but SPACs have made accessibility easier and deeper the pool of capital raising for these companies.
The report finds that the UAE has been at the forefront of increasing PSPC activities in the region. Earlier this year, Anghami, one of Mena’s leading music streaming platforms with Lebanese roots and its headquarters in Abu Dhabi, announced its intention to go public on Nasdaq by merging with SPAC from Vistas Media Acquisition Company (VMAC ), for a valuation of $ 220 million.
The latest SPAC announcement for Mena hit the third Unicorn in the region, as Swvl Inc., a Dubai-based provider of transit and shared mobility solutions, announced plans to go public through a merger with Queen’s Gambit. Growth Capital (GMBT) SPAC, at a valuation of $ 1.5 billion.
Swvl trading on the Nasdaq is expected to begin once the transaction is completed in the fourth quarter of 2021. This will make Swvl the second Mena tech startup to go public via a SPAC route listing, following the landmark deal. ‘Anghami who led the way and exemplified the global ambitions of Mena-based companies.
Elsewhere, sovereign wealth funds in the region, such as Saudi Arabia’s Public Investment Fund (PIF) and Abu Dhabi’s Mubadala, have also been involved in notable PSPC deals in US markets.
Examples of such deals this year are PIF’s investment in Compute Health which is listed on the NYSE and Blue Whale Acquisition Corp I which was formed by Mubadala Capital and targets media and entertainment companies. As the unprecedented boom in the PSPC market transforms and reshapes capital markets, only time will show how the appetite for PSPCs evolves.
Gregory Hughes, EY Mena IPO and Transaction Diligence Leader, said: âIPO activity in the first half of 2021 has been below expectations, nonetheless the year has brought remarkable deals with Mena companies showing ever-growing interest in PSPC transactions as a means of going public. “
âWe expect this trend to continue as companies seek to increase their international presence and access a larger pool of investors. The positive performance of the stock market in the Mena region provides a favorable context for IPO candidates looking to list their shares and the IPO outlook is favorable for Mena companies which now have a variety of options in terms of the avenues available to them to access capital markets. “Hughes concluded. – TradeArabia News Service