Spinneys, the operator of premium supermarkets in the UAE and Oman, saw its share price rise as it began trading on the Dubai Financial Market, following an initial public offering that raised Dh1.37 billion ($375.7 million).
The company's stock rose 9.15 per cent to Dh1.67, from the set share price of Dh1.53, giving it a market capitalisation of more than Dh6 billion after the DFM's opening bell on Thursday. Gains slowed to about 5.9 per cent as its share price retreated to Dh1.62 as of 11.05am UAE time.
Spinneys announced its plans to list on the DFM on April 16 as it sought to tap into “enormous opportunities” to grow its UAE presence and expand into Saudi Arabia.
All shares being offered in the public float are held by Al Seer Group as the selling shareholder.
The overall size of the offering is 900 million shares, representing 25 per cent of the total issued share capital of the company.
The number of shares offered to retail investors was increased to 63 million, from 45 million, representing 7 per cent of the total offering. Shares allocated to professional investors were reduced to 837 million, from 855 million.
“This listing will provide us with an added strategic flexibility for our ambitious plan going forward,” Sunil Kumar, Spinneys' chief executive, told The National last month.
“It will attract a wider spectrum of shareholders from diversified portfolios and we will have access to the capital market to achieve our ambitious plan.”
The UAE and Saudi Arabia offer the high-end supermarket chain “white-space opportunities, considering the macroeconomic growth in this region”, he said.
Spinneys expects robust demand from regional and international investors based on discussions in which the company outlined its future growth plans and expected dividend payout, Mr Kumar said.
The company's IPO comes amid a listing boom in Dubai and the wider GCC on strong economic growth and increasing demand from investors.
In November 2021, Dubai said it would list 10 state-owned companies and establish a Dh2 billion market maker fund to encourage listings from private companies in sectors such as energy, logistics and retail.
The government aims to expand the size of the emirate's financial market to Dh3 trillion. Six state-owned enterprises have been listed on the DFM since 2022.
Companies in Dubai raised Dh34.5 billion through selling shares in the past three years, with aggregate investor demand for those listings reaching more than Dh1 trillion, the Dubai Securities and Exchange Higher Committee said in March.
Last month's IPO by parking operator Parkin, the first in the UAE capital markets this year, raised Dh1.57 billion from investors. Demand for the deal hit a record Dh259 billion.
Spinneys has a 27 per cent share in its target market in Dubai and 12 per cent of the Dh23 billion target market in the UAE in 2022 amid continued growth in its online sales, its private label brands and its fresh food offerings.
The supermarket chain, which operates 75 grocery retail supermarkets under its own brand, as well as the Waitrose and Al Fair brands in the UAE and Oman, plans to expand into Saudi Arabia, the Arab world's largest economy, this year.
It intends to open its first shop in the kingdom in the first half of the year, with three more to follow by the end of 2024, Mr Kumar said.
In the UAE, Spinneys is banking on a “wide range of growth potential”.
It will establish Kitchen by Spinneys that will provide ethnic food options, with the first concept store to open in Dubai Mall in the first half of this year, he said.
Spinneys had a 27 per cent share in its market in Dubai and controlled 12 per cent of the Dh23 billion target market in the UAE in 2022.
