Al Ah­lia In­sur­ance IPO gets strong re­sponse

Muscat Daily - - FRONT PAGE -

Al Ah­lia In­sur­ance Co’s ini­tial pub­lic of­fer­ing (IPO), which opened for sub­scrip­tion on July 4, has been well re­ceived by the mar­ket.

The IPO has at­tracted pos­i­tive feed­back from in­vestors fol­low­ing the com­pany’s meet­ings with some of the most in­flu­en­tial in­vestors and an­a­lysts in Oman, ac­cord­ing to a press re­lease is­sued on Wed­nes­day. The sub­scrip­tion for Al Ah­lia IPO will be closed on Au­gust 2.

An IPO re­search note is­sued by U-Cap­i­tal rec­om­mended to ‘sub­scribe’ to Al Ah­lia IPO. UCap­i­tal es­ti­mates a fair value of 350bz per share for Al Ah­lia IPO, im­ply­ing an up­side po­ten­tial of 16.6 per cent to the of­fer price of 300bz per share.

The U-Cap­i­tal note ac­knowl­edges Al Ah­lia’s at­trac­tive full div­i­dend pay­out pol­icy, pro­jected 9.3 per cent div­i­dend yield of­fered to in­vestors, along with in­vestors’ ap­petite for high div­i­dend pay­out as a key driver for the as­signed val­u­a­tion.

The IPO note also high­lighted the strength and rep­u­ta­tion of Al Ah­lia’s pro­mot­ers, track record of con­sis­tent fi­nan­cial per­for­mance com­pared to peers in the in­dus­try, pru­dent busi­ness strat­egy, strong sol­vency mar­gin at 260 per cent (160 per cent above the min­i­mum level pre­scribed by the CMA), high stan­dards of cor­po­rate gov­er­nance, and the high-qual­ity, low-risk and low-volatil­ity in­vest­ment pol­icy adopted by the com­pany. It fur­ther stated that in the first quar­ter of 2017, the com­pany made a profit of RO1.6mn trans­lat­ing into 65 per cent of its es­ti­mated prof­its for en­tire fi­nan­cial year 2017.

Com­ment­ing on the favourable re­ac­tion by in­vestors and an­a­lysts, Lloyd East, re­gional CEO, RSA (Mid­dle East) and manag­ing direc­tor of Al Ah­lia said, “We are pleased by the pos­i­tive re­sponse and sig­nif­i­cant level of in­vestor in­ter­est. The rec­om­men­da­tion re­ceived for the Al Ah­lia IPO is a strong val­i­da­tion of the of­fer price and at­trac­tive­ness of the IPO to in­vestors. Com­pany’s in­ter­na­tional parent­age from the RSA Group, grow­ing share in in­dus­try prof­its as well as at­trac­tive div­i­dend pol­icy be­ing of­fered by the com­pany have been well ap­pre­ci­ated.”

Al Ah­lia is of­fer­ing 25mn shares at an of­fer price of 300bz per share (com­pris­ing a nom­i­nal value of 100bz and a pre­mium of 200bz per share). The IPO rep­re­sents an of­fer of 25 per cent of the share cap­i­tal of the com­pany.

At the IPO price, the com­pany of­fers an at­trac­tive av­er­age pro­jected div­i­dend yield of 9.3 per cent for the first four years. The first div­i­dend of 11bz is ex­pected to be paid in Au­gust/Septem­ber 2017 with semi-an­nual div­i­dend dis­tri­bu­tions there­after.

Bank Mus­cat’s in­vest­ment bank­ing di­vi­sion is the fi­nan­cial ad­vi­sor and the sole is­sue man­ager for the IPO. Re­tail in­vestors can col­lect the sub­scrip­tion forms and sub­mit their ap­pli­ca­tions in any of the col­lect­ing banks which in­clude Bank Mus­cat, Oman Arab Bank, Ah­libank, Bank So­har, Na­tional Bank of Oman and BankDho­far.

U-Cap­i­tal es­ti­mates a fair value of 350bz per share for Al Ah­lia IPO, im­ply­ing an up­side po­ten­tial of 16.6 per cent to the of­fer price of 300bz

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