Investcorp Capital IPO: Company aims to raise $403 million through ADX listing

IVC Strategic Investment Company will be a cornerstone investor in the IPO with a $250m commitment

Abu Dhabi Securities Exchange. Photo: ADX

Shareholders in Investcorp Capital, which offers capital financing services in the alternative investments space, are looking to raise as much Dh1.48 billion ($403 million) through the sale of a 29.34 per cent stake in an initial public offering on the Abu Dhabi Securities Exchange.

The company, which is part of the Mubadala Investment Company-backed Investcorp Group, will sell 643 million ordinary shares, including 321.5 million newly issued shares, at a price range between Dh1.90 and Dh2.30 a share, it said on Thursday.

The indicative price band values the company between Dh4.16 billion and Dh5.04 billion, with an implied target dividend yield of 9.9 per cent to 8.4 per cent for the financial year ending June 30, 2024.

IVC Strategic Investment Company will be a cornerstone investor in the IPO with a committed investment $250 million.

The subscription period for the public float starts on November 2 and will run until November 8 in the first tranche, and until November 9 in the second tranche for professional investors, the company said.

As part of the offering, 5 per cent will be allocated in the first tranche and 95 per cent in the second.

There is a minimum application size of Dh50,000 in the first tranche and Dh5 million in the second.

“The final offer price is expected to be announced on November 10 while admission [the listing on the ADX] is expected to occur on November 17,” the company said.

Investcorp Capital intends to use the net proceeds of the offering to further develop its capital financing services business and increase its investments into the capital deployment business of about $100 million, the company said in October when it announced its intention to list shares.

It also plans to use the funds to finance strategic growth opportunities and general corporate purposes.

“With the support of our four decades of alternative asset management expertise that have allowed Investcorp to grow to approximately $50 billion AUM [assets under management], including assets managed by third parties and our global presence, Investcorp Capital is well positioned to provide a unique investment opportunity and attractive risk-adjusted returns,” its executive chairman Mohammed Alardhi said at the time.

Investcorp Capital invests capital either into funds managed or controlled by its clients or directly into alternative investments, including private corporations, property assets and collateralised loan obligations.

It has interests in private equity, real estate and credit management, and holds general partner positions in North America, Europe, the Middle East and Asia.

The company also provides capital financing services, generating fee-based income through the charging of underwriting and commitment fees to its clients.

While the geopolitical tension in the Middle East, particularly the Israel-Gaza conflict, have affected investors and markets globally, the company is positioning the IPO as a “long-term” initiative, Hazem Ben-Gacem, vice chairman, non-executive director and co-chief executive of Investcorp Holdings, told The National in an interview last month.

“What we are doing is not about a certain transaction at one point in time. This is not about the IPO. This is about evolving Invescorp to be a big part of the UAE public markets, the financial ecosystem,” he said at the time.

Investcorp’s move to list its subsidiary and tap the equities market for growth capital comes amid a flurry of listings in the GCC despite global economic challenges.

The ADX, the Arab world’s second-largest exchange by market value, accounted for 14 per cent of all listings worldwide in the first quarter of 2023, an indication of the strength of its capital markets amid a challenging global IPO market, according to consultancy EY.

The bourse attracted $3 billion worth of listing proceeds in the first three months of this year, placing it third worldwide, with Adnoc Gas raising about Dh9.1 billion from the sale of a 5 per cent stake.

The ADX also hosted the largest Mena IPO in the second quarter, with Adnoc L&S raising $769.5 million.

The Dubai International Financial Centre branch of Moelis & Company UK has been appointed as the independent financial adviser for the listing.

Emirates NBD Capital, First Abu Dhabi Bank and HSBC Bank Middle East have been appointed as joint global co-ordinators and bookrunners.

Emirates NBD Bank and First Abu Dhabi Bank have been appointed as the joint lead receiving banks while Al Maryah Community Bank and Mashreqbank are the receiving banks.