Talabat raises $2bn from biggest Gulf IPO this year

Food platform set price at top of range and will trade on Dubai bourse from December 10

Talabat says its public float has garnered significant interest from local and international investors. Bloomberg

Talabat Holding, the Middle Eastern unit of Germany's food delivery platform Delivery Hero, has raised Dh7.5 billion ($2.04 billion) through its initial public offering, setting the price at the top of the range for the biggest public float in the Gulf this year.

The company closed the books at Dh1.60 per share, which implies a market capitalisation of Dh37.3 billion at the time of its listing, Talabat said on Friday. It said the deal is also "the largest global technology IPO in 2024 to date" which garnered significant investor interest.

Trading is expected to begin on or around December 10 under the ticker symbol “TALABAT” on the Dubai Financial Market.

"Having attracted a double-digit oversubscription level, it is clear that Talabat’s offering presented both international and local investors with a unique opportunity to gain exposure to a technology-driven and dynamic on-demand delivery market," said Tomaso Rodriguez, chief executive.

Frankfurt-listed and Berlin-based Delivery Hero retains a majority interest in Talabat, which post-listing plans to pay a minimum dividend of about $100 million in April next year for the fourth quarter of this year. The company will pay $400 million in two installments in October and April 2026 for the financial results of 2025, the company said in September.

Talabat, which offers delivery of food, groceries and convenience retail, has operations in the UAE, Kuwait, Qatar, Bahrain, Egypt, Oman, Jordan and Iraq. In September, its platform had more than six million active customers, more than 65,000 participating restaurants, other groceries and retail vendors. It also had about 119,000 riders.

"As we look ahead, we are confident that our growth strategy focused on enhancing our product offering and increasing our market penetration, investing in our loyalty programmes, scaling our advertising offerings and exploring adjacent categories, will power the next phase of talabat’s success," Mr Rodriguez, said.

Talabat joins a growing list of regional companies that are seeking to raise funds through listings amid continued economic momentum in the region. In just the third quarter of this year, the aggregate value of IPO proceeds rose to $904 million, compared with $523 million from six deal in the three-month period last year, global consultancy PwC said in the Q3 2024 IPO Watch report.

The regional markets bucked the global trend where IPO activity remained muted, with a dip in year-over-year volumes by 14 per cent to 310 IPOs. The total proceeds also declined by 35 per cent to $24.9 billion, modestly outpacing the first two quarters of 2024 in IPO launches, according to an EY report.

In the UAE, the Arab world's second largest economy, listing activity has remained robust since it bounced back strongly from the pandemic-driven slowdown in 2020.

Talabat's IPO – which is just marginally ahead of Oman's OQEP, the exploration and production business of Oman's state oil company's $2 billion float on the local stock exchange – follows Lulu Group’s shares debuted on the Abu Dhabi Securities Exchange this month, after the company raised Dh6.32 billion from its IPO.

The string of other deals this year in the UAE include ADNH Catering, a unit of Abu Dhabi National Hotels, which raised $235.2 million, NMDC Energy, a unit of Abu Dhabi contractor National Marine Dredging Company, raising $877 million, and Alef Education, which raised $515 million.

Analysts say the pipeline of IPO deals also remains strong amid robust expansion of the non-oil sector in the Emirate's economy. The UAE's governments push to unlock value in state entities and part sell stakes is also supporting deals flow.

The UAE's economy is forecast to grow 4 per cent this year, up from the previous estimate of 3.9 per cent in June, according to the UAE Central Bank.

Earlier this month, the UAE stock markets hit $1 trillion in aggregate market capitalisation, primarily driven by IPO momentum, as well as strong earnings.

The total market capitalisation of the two bourses that make the UAE market rose above Milan or Madrid stock markets, according to data compiled by Bloomberg. While dwarfed by the nearly $3 trillion Saudi Arabian Tadawul stock market, the UAE is larger than most emerging markets, barring a few like India and China, data showed.

There are 100 firms listed on the ADX, while on DFM it is 68, according to data provided by the two bourses last week.