Alef Education Holding plc, an AI-powered learning solutions provider based in Abu Dhabi, on Tuesday announced a price range of Dh1.30 and Dh1.35 per share for its initial public offering.
The offer price range implies a market capitalisation at the time of listing of between Dh9.10 billion ($ 2.48 billion) and Dh9.45 billion.
The final offer price will be determined following the book-building process and is expected to be announced on June 6. Admission of shares to trading on the main market of the Abu Dhabi Securities Exchange (ADX) is anticipated to occur on or around June 12, the company said.
The IPO subscription period started on Tuesday and is expected to close on June 4 for individual investors (first tranche) and June 5 for professional investors (second tranche).
The company expects to distribute a minimum dividend of Dh135 million with respect to each of its financial years ending December 31 2024 and 2025 to all other shareholders (other than the Selling Shareholders), implying a dividend yield of around 7.42 per cent at the bottom of the price range and around 7.14 per cent at the top of the price range.
Geoffrey Alphonso, chief executive officer of Alef Education, commented: “Our investment proposition has been incredibly well received by the market, with significant interest in our offering since announcing our intention to float. With the opening of subscriptions, we are offering UAE and international investors the opportunity to participate in the growth of a leading and homegrown player in the education technology sector — an underrepresented sector across UAE capital markets. Building on our successful track record to date and leveraging the favourable market conditions and strong market opportunity, we are committed to driving further growth across our platform and delivering sustainable long-term shareholder value, supported by our robust dividend policy. Leveraging organic and inorganic means, we aim to super-serve our home market of the UAE, execute against our high-impact B2G strategy — solidifying our status as a partner of choice—and tap into the global B2B market to unlock further scale. We look forward to announcing the final offer price next week and are excited to welcome new shareholders as we embark on our next phase of growth.”
The deal comes amid a bustling period for IPOs in the Arabian Gulf. Saudi Arabia has recently experienced a surge in IPO activity, with several offerings heavily oversubscribed. Dubai has hosted two significant IPOs this year: the $429 million listing of Parkin Co., the city’s public parking business, and the $375 million float of high-end supermarket Spinneys 1961 Holding Plc. Notably, Spinneys’ IPO is unique in the Gulf region as it is not backed by the government.
“Alef Education offers another investment opportunity in the growing education sector, utilising advanced tech platforms. Its Shariah-compliant status, declared by First Abu Dhabi Bank, is expected to attract considerable interest from local investors. Additionally, many UAE parents, who spend significantly on their children’s education, may find the stock appealing,” Vijay Valecha, Chief Investment Officer, Century Financial, said in a note.
Parents in the UAE are among the highest spenders on education globally. Dubai’s appeal as a post-COVID haven has attracted many newcomers, where private schooling is mandatory for expatriate children, highlighting the potential value of Alef Education’s stock.
The company’s generous dividend policy is expected to appeal to investors, who will closely monitor the valuation offered in the upcoming IPO, Valecha said. Private school operator Taaleem Holdings, which listed in Dubai at the end of 2022, saw its shares initially dip below the offer price but have since risen 23 per cent as profits increased with higher student enrolments.
“Alef Education’s IPO is poised to attract significant interest due to its strong financial performance, strategic growth plans, and high regional demand for quality education. Its generous dividend policy and solid cash conversion ratio add to its appeal. Investors will closely watch the valuation, anticipating substantial growth in the expanding ed-tech market,” Valecha said.