A company considering an Initial Public Offering (IPO) faces an exciting, yet challenging, decision that will represent a significant key milestone in the company's history.
Deciding whether to float your company on a stock market is an important decision. Most successful privately owned companies will eventually reach a stage in their development
where they consider whether the next natural step is to join a market. Joining a capital market provides the issuing entity with the opportunity to benefit from improved access
to capital, increased global profile and access to liquidity. It also incentivizes the company to transform itself into a sustainable business model.
Dubai Financial Market (DFM) is one of the most dynamic capital markets in the Middle East. Based in the region's financial hub,
Dubai, which offers a well-diversified economy in international trade, banking and finance, tourism, information technology and infrastructure.
Established in 2000 as a government owned exchange, DFM provides investors and market participants the best in class international platform facilitating
the ease of listing of a variety of asset classes. In 2007, the DFM was the first exchange to be publicly listed,
as well as first exchange regionally to be operating with sharia' principles.
Key benefits the DFM provides a company looking to list in Dubai:
3. Board of directors in case of PJSC.
The Lead Manager is appointed to do the preparatory work for going public and to appoint the other Advisors required for the IPO.
Usually Investment Banks are appointed as Lead Managers. The key responsibilities of the Lead Manager include the following:
This firm prepares the financial reporting to give the assurance that the Company is eligible for an IPO. The Report is a detailed financial and business analysis of the Company, covering its financial record, capital structure and forecasts. The Reporting Accountant Firm also audits the Company's asset valuation report and conducts an interim audit covering the period from the date of the last financial statement up to the listing date.
The Company will have to appoint an independent valuer to prepare a valuation report of the assets, which will constitute the founders' in-kind contribution in the capital of the PJSC.
The Company will have to appoint an advisor who will prepare a feasibility study outlining the viability of the project.
The Legal Advisor's primary concern is:
Usually the Lead Manager also acts as the Financial Advisor, advising the Company on all financial matters, and contributes to the drafting of the feasibility study.
A Company may appoint a separate financial advisor, as it deems appropriate.
The Receiving Banks receive the subscription funds and makes refunds to Subscribers for unallocated shares in case of over subscription.
The Rating Agency assists in the IPO pricing.
Some Companies prefer to seek the services of a PR/Communications Company to promote the IPO, within the legal boundaries. DFM also offers many communication tools that can be utilised through the PR/Communications agency as part of their communications planning.
This is completed via collaboration between the Company and its Advisors.
The feasibility study should include, but is not limited to, the following:
A valuation of assets is required to assess the Founders' contribution in kind, in the PJSC capital.
The Prospectus provides a complete overview of the Company, its business, the management, risks, material agreements, and the terms of any fundraising. The objective of the Prospectus is to provide to potential investors all the necessary information to assist investors to take informative investment decision.
The Prospectus contains the following information:
The founders are jointly responsible for the validity of the information stated in the Prospectus.
4. In case of bookbuilding process, SCA will rely on the valuation done by the independent valuer appointed by the Company provided that SCA approves the valuer.
If such a quorum is not achieved, then a second CGA meeting is called to convene after five (5) days from the date of the fist Assembly. The second Assembly shall be valid regardless of the number of the Subscribers represented therein.
The meeting is presided over by the person elected by the CGA from amongst the founders. SCA and the DED may send one or more representatives to attend the meeting of the General Assembly as Observers without the right to vote, and their presence shall be recorded in the minutes of the CGA.
The CGA specifically considers the following matters:
5. It is possible to include the invitation to the CGA in the prospectus.
The application form adopted by the SCA (filed in two copies), along with a letter giving the following details:
The following documents are submitted along with the application form:
The key steps for a company considering going public reflect the mandatory requirements from the Department of Economic Development (DED) and Security and Commodities
Authority (SCA). From the initial evaluation
of the company meeting the eligibility requirements, to appointing an advisory team and submitting all the required documentation to convert into a PJSC,
through to registration and actual listing the PJSC shares on the DFM.
The below summarises the key stages of the IPO process.
(Steps 1 – 3)
(Steps 10 – 11)
(Steps 13 – 14)
(Steps 18 - 20)
There are several key factors that are required to be made when considering an IPO:
The following are the key eligibility requirements (these rules apply on the conversion of LLCs and PJCs)
Below are some useful documents and information to consider while thinking of an IPO:
Please click here.
The company submitting the listing application may have to satisfy additional requirements and furnish additional documents and information that the SCA or DFM may require.
The directors of the company will individually and collectively accept full responsibility for the completeness and accuracy of all information submitted to DFM.
DFM shall not assume any responsibility for the correctness of any of the information, statements or opinions submitted to DFM.
approval for listing at DFM is not to be taken as an indication of the merits of the company or its business activities or its shares.
DFM Board of Directors shall have discretionary authority to exempt a company from some of its listing requirements or submitting certain documents.
DFM may decline a listing application without assigning any reason.
In addition to the above listing requirements, to publish, in two Arabic daily Newspapers ten days prior to listing on DFM, the company’s annual financial statements and summary of the Board of Directors’ report, which were submitted with the SCA Listing Application. Additional publishing in one English Newspaper is required if the company allows non-nationals to trade in its shares.
The publication should include:
Company Listing Fees
Fee Value (AED)
Application fee to list a company
Listing fee of a company with a capital of AED 500 million or less
40% SCA 60% DFM
Listing fee of a company with a capital of more than AED 500 million up to AED 2 billion
Listing fee of a company with a capital exceeding AED 2 billion
40% SCA 60% DFM
Company Listing Renewal Fees
Listing renewal of a company with a capital of AED 500 million or less
30% SCA 70% DFM
Listing renewal of a company with a capital of more than AED 500 million up to AED 2 billion
30% SCA 70% DFM
Listing renewal of a company with a capital exceeding AED 2 billion
Application fee to cancel the listing
Having the right team in place from the outset is crucial to the success of the IPO.
Internal IPO Team
Regulators & Economic Departments
DFM IPO Team
Reception - Mezzanine Floor
World Trade Centre (Rashid Tower)
Sheikh Zayed Road
P.O. Box: 9700
Dubai, United Arab Emirates
Makani No: 27608 91214