Talabat, a subsidiary of Delivery Hero in the Middle East, raised $2 billion in an initial public offering on December 10. Talabat sold more than 4.65 billion shares at a price of 1.60 dirhams ($0.44) per share. The sale of the 20% stake represents a market value of about $10 billion.
Berlin-based Delivery Hero decided to increase its supply size from 15% to 20%, due to strong demand.
Tommaso Rodriguez, CEO of Talabat, a regional food ordering and retail marketplace, confirmed that the offer was oversubscribed by double digits. He said: “It is clear that Talabat Offers provided international and local investors with a unique opportunity to learn about a leading player in the technology-driven and dynamic on-demand delivery market in the MENA region.”
Talabat’s IPO is the largest listing in the UAE of 2024. Launched in Kuwait in 2004, the company is active in five of the six GCC countries in addition to Egypt, Iraq and Jordan. It does not work in Saudi Arabia. Analysts say that Talabat, which has six million active customers, expects the proceeds from the offering to pay off Delivery Hero’s debts.
But Talabat’s December debut on the Dubai Financial Market was met with a weak response, with shares falling 7.5% on the first day of trading. This is due to its competitive pricing, said George Pavel, general manager of trading app Naga Middle East. “The company and its underwriters priced the IPO at AED 1.60, the upper end of the marketed range, with a price-to-earnings ratio of 28 times – well above the Dubai Financial Market General Index average of nine times.”
That left no room for an upward move and would likely prompt investors to question the valuation premium, he added.
IPOs in the GCC countries have raised nearly $12 billion in 2024. Investors have been attracted to the GCC capital markets amid dull expectations for IPOs in the US and European markets.
