Dubai: Marka’s first IPO on the Dubai Financial Market (DFM) since 2009 on Sunday has been very good.

The public joint-stock company, under incorporation with a capital of Dh500 million, is planning to raise Dh275 million or 55 per cent of the company shares at a price of Dh1 per share plus a subscription fee of three fils per share.

Mahdi Mattar, CEO of CAPM Investment, the lead adviser, told Gulf News that the response has been very good since it is the first day of the offering.

“We are getting a lot of queries from investors across the board. The receiving banks have already allocated work groups within their branches to meet the expected large turnouts and in order to avoid long queues. We expect the demand to increase over the next few days given that large institutional investors subscribe in the later part of the subscription period,” he said.

Investors can subscribe to Marka shares for 12 days and the subscription will be closed on April 24. Marka is also the first public shareholding firm within the retail sector in the UAE to issue an IPO.

“Given the buoyancy in the market, we do expect strong appetite for the IPO. Positive outlook of the retail sector in general should also help the IPO. We would like to see the implementation of the management’s business strategy, and meeting their growth targets in order to make a better judgment,” said Vijay Harpalani, Assistant Fund Manager at Al Mal Capital.

Roll out stores

As per Emirates Securities and Commodities Authority (ESCA) guidelines, he said that 45 per cent of the shares or 225 million shares needs to be subscribed by founders before the remaining 55 per cent of the shares or 275 million shares are offered to the general public via IPO.

In March, 151 founders subscribed to 225 million shares.

“Marka will use the proceeds from the IPO primarily towards rollout of fashion stores, restaurants and cafes in the region. It is planned that the company will allocate 50 per cent of its capital for opening of fashion retail stores and the other 50 per cent will be allocated for the opening of restaurants and cafes,” he said.

The minimum subscription has been kept low at 5,000 shares in order to allow “all the retail investors to participate in the IPO.”

“We have not set any maximum limit for subscription of the IPO shares. However, the allocation of shares will be based on the laws of ESCA, which recommends a pro-rata allocation. In addition, we have set a maximum limit of 5 per cent ownership in the company,” he said.

The IPO is open to investors of all nationalities, provided 51 per cent of equity is held by GCC nationals or GCC legal entities.

Eight banks and financial institutions will receive the contributions of the investors willing to subscribe to the company’s shares, including National Bank of Abu Dhabi, Union National Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank, National Bank of Fujairah, Commercial Bank International, Finance House and Islamic Finance House.