A portion of construction and engineering firm Alec Holdings’s shares is to be listed on Dubai’s main stock exchange, DFM, through a public offering orchestrated by the company’s sole shareholder, Investment Corporation of Dubai.
The official prospectus says the offering of 1 billion shares will represent 20% of the company. The shares are to be divided into three tranches and will be offered between 23rd September and 30th September.
A huge majority of 94% of shares to be offered (940 million shares) will be reserved for the second tranche, which professional investors with a registered NIN (Investor Number) on the Dubai Financial Market can subscribe to.
The second tranche is to specifically target financial institutions, corporations, government institutions, family offices, service-based professionals, high-net-worth individuals, and several other relevant categories of investors.
The announcement of the final offer price will take place on October 1st, and the expected listing date for the shares will be on or close to October 15th.
Apart from the DFM’s main IPO platform, interested investors may turn to multiple Dubai-based banks which will be offering e-subscription services as per the company’s prospectus for the first and third tranches of shares, including Emirates NBD, M-bank, ADIB, CBD, Dubai Islamic Bank, Emirates Islamic Bank, Emirates Islamic Bank, FAB, and others.
“Construction business is generally risky, since defaulting or late payment could cause issues to ALEC Construction’s business model,” said independent investment analyst Newton Cordeiro.
“I wouldn’t be surprised if post IPO, there is a drastic fall in share price, likely due to sell off from major shareholders. Pre-IPO shareholders have 6-month holding periods. After 6 months, there are generally large sell-offs,” he also said.