Dubai Financial Market offers Indian entrepreneurs route to attract global investment

Even as several international stock markets suffered their worst falls in nearly a decade, the Dubai Financial Market (DFM) became one of the most active markets globally for initial public offerings (IPOs) and listings in 2022.

Five Dubai government-related and leading private-sector issuers successfully raised more than $8.42 billion last year and their IPOs witnessed remarkable oversubscriptions drawing $182 billion of subscribed amounts.

And now, along with a healthy pipeline of activity planned for this year, DFM has big plans to support businesses in the region on their path to growth with the launch of an IPO Accelerator Program – a move that also reflects a unique opportunity for India’s startups to tap into the emirate’s capital markets.

“We welcome Indian entrepreneurs to explore the immense potential that Dubai offers and consider DFM as a launchpad for their future success,” Hamed Ali, CEO of DFM and Nasdaq, said.

“Listing on DFM can provide them with enhanced exposure, access to international investors, and a gateway to expand their reach beyond borders. India has been recognized as a powerhouse for innovative startups, and over the past few years we have witnessed the remarkable growth of Indian companies expanding their operations to the UAE. With its geographical location, dynamic business environment, and access to diverse markets, Dubai presents unparalleled opportunities for Indian startups seeking further growth and global visibility.”

DFM’s IPO Accelerator has been designed to showcase a roadmap for startups and SMEs, including expertise around Dubai’s regulatory environment, business culture and capital opportunities for scaling ventures through to an IPO.

The initiative will run workshops and offer one-on-one meetings with key prospects to help businesses create a customized route towards going public, providing them with the necessary education, support, and guidance to explore a listing opportunity.

The program runs in partnership with the Dubai Chamber of Commerce and 20 regional and global advisors including Al Tamimi & Co, Arqaam Capital, Bank of America, Barclays, Citi, deNovo Partners, Edelman Smithfield, EFG Hermes, Emirates NBD, EY, Goldman Sachs, Grant Thornton, HSBC Bank Middle East Limited, Ibrahim N. Partners, J.P. Morgan, Moelis & Company, Morgan Stanley, PwC Middle East, Rothschild & Co, and White & Case LLP.

Once a business considers going public, the program will liaise with key advisors to make necessary introductions, work with financial advisors for an IPO readiness check, and prepare a listing plan with ongoing support from DFM and Dubai Chamber through the process.

The program is ultimately geared towards helping businesses chart a course ahead, Ali added.

“We don’t expect [businesses] to list in six months because [they] registered in the IPO Accelerator,” he said.

“This is us telling a business what the experience is like. There is an ecosystem here that operates very well, and this ecosystem is at their disposal. The reason we want to have this level of engagement early on with businesses is that they might be thinking of an IPO four or five years down the road and so here are the factors to consider.”

Ali attributed DFM’s “unprecedented” success last year to bringing “quality assets” to the exchange – which has resulted in attracting significant attention from international investors seeking new investment opportunities, reflecting confidence in the market’s profitable trading opportunities.

The listing of the Dubai Electricity and Water (DEWA), for example, raised $6.1 billion making it the region’s biggest IPO since Saudi Aramco.The orderbook for the IPO was 37 times oversubscribed.

“In terms of the number of investors admitted to the market, typically in a year you’d see somewhere between 4,000 to 7,000 new investors,” Ali said.

“Last year, we added 167,000 investors of which 72% were beyond the borders of UAE. [This] shows us the demographic changes and the new interest that we were attracting.”

DFM’s trading value touched AED 19 billion during the first quarter of 2023 and added 14,635 new investors.

Institutional investors accounted for 68% of trading value.

Foreign investors held 56% of the market share of trading value and accounted for 78% of new investors on DFM, lifting the total investor base to 1,185,291 from 215 nationalities.

Faizal Bhana, Director Middle East, Africa and India, Jersey Finance, added that DFM’s accelerator could provide the Indian startup ecosystem an opportunity to tap into a global pool of investors who recognize the growth potential and innovation emerging from the sub-continent.

“We have witnessed a number of innovative startups [from India], including some of the finest fintech companies, move to the Gulf markets,” Bhana said.

“We have observed that especially technology-based [companies] are successfully running in UAE and performing at par with local ventures. There is no denying that there is remarkable growth of Indian companies that are willing to expand their operations to the UAE. Dubai as a global financial hub [offers] a unique platform for ambitious entrepreneurs to take their ventures to new heights.”

With over 70 companies listed on the exchange, DFM is one of the largest marketplaces in the Middle East, making it an attractive destination for investors seeking to diversify their portfolios.

According to the latest EY MENA IPO Eye report, globally, 2022 saw a total of 1,333 IPOs raising $179.5 billion in proceeds, a 45% decrease in volume and 61% decrease in value year-on-year. The strongest downward trend was observed in the Americas.

The Middle East and North Africa (MENA) region, however, continues to remain a bright spot. According to Bloomberg data, MENA IPOs raised over $18 billion in 2022, representing 47% of the $38.2 billion raised in the wider Europe, Middle East, and Africa (EMEA) market.

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