Dubai Taxi Company shares surge on DFM debut

The government-owned taxi service provider’s share price jumped about 19% in early trading

Dubai Taxi Company launched on the DFM on Thursday and Its IPO was 130 times oversubscribed. Photo: DFM

The shares of Dubai Taxi Company surged nearly 19 per cent above the listing price of Dh1.85 per share on Thursday as the company made its debut on the Dubai Financial Market.

The company, which started trading under the ticker symbol “DTC”, jumped to Dh2.20 in early trading on the DFM, giving it a market value of more than Dh5.42 billion ($1.48 billion).

DTC raised Dh1.2 billion in the initial public offering after selling 624.75 million shares, equivalent to 24.99 per cent of the company's total issued share capital at the higher end of the price range.

The company had set the price range of its IPO between Dh1.80 and Dh1.85 per share.

The IPO drew strong demand from investors, and was 130 times oversubscribed. The total demand for the offering amounted to more than Dh150 billion.

“Our record-breaking listing on the DFM marks a major milestone in DTC’s journey, as we continue to play a critical role in developing Dubai’s world-class mobility infrastructure and sustainability vision,” said Abdul Kalbat, chairman of DTC.

Following the completion of the IPO, the Department of Finance, representing the government of Dubai, will continue to own 75.01 per cent of DTC’s share capital.

Dubai Taxi Company was founded in 1995 and has a fleet of about 7,000 vehicles that service a growing population. It is the biggest taxi operator in the emirate and currently holds about 44 per cent market share.

About 96 million journeys were made on Dubai's fleet of taxis in the first half of this year – with hybrid vehicles accounting for more 70 per cent of the cars in service.

The company’s IPO comes after Dubai announced plans in November 2021 to list 10 state-owned companies to increase the size of its financial market to Dh3 trillion, as well as set up a Dh2 billion market-maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

Four of the 10 state-owned enterprises listed on the DFM last year.

The listing of Dubai Electricity and Water Authority was the largest GCC IPO last year, raising $6.1 billion.

State-owned Tecom, Salik and Empower collectively raised $2.2 billion in June, September and November 2022, respectively.

The total value of equity listings on the DFM reached Dh12.3 billion this year.

During the first nine months of 2023, the DFM General Index gained 24.8 per cent and the total trading value of the bourse rose to Dh78 billion, according to DFM.

The money raised from the IPO will go to the Department of Finance, representing the government of Dubai, after adjusting for any expenses related to the offering.

Emirates NBD Capital, First Abu Dhabi Bank and EFG Hermes UAE were the joint lead managers for the IPO.