Interest in subscribing to the UAE's first initial public offering (IPO) in more than two years was "better than expected" yesterday but no institutional investors had signed on.
The overall response to the proposed Insurance House share sale was positive even if it was limited to retail investors, bankers said.
Insurance House, based in Abu Dhabi, is aiming to raise Dh66 million (US$17.9m) in capital from the public through the IPO.
The initial subscription, which closes on March 9, is available only to UAE nationals. Non-nationals can buy shares in the company after it is listed on the Abu Dhabi Securities Exchange.
Most of the investors who inquired about subscribing were long-term investors and not speculators, said Majd Maaitah, the director of securities services at National Bank of Abu Dhabi, one of four receiving banks for the IPO.
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"It's not the best timing for the initial public offering but considering the size of the offering, the story behind the firm and its reputation in the market, that's what we are selling to investors," Mr Maaitah said.
Most of the subscription requests were for the minimum amount of 25,000 shares, he said.
According to UAE regulations, all new insurance companies must be publicly listed, with a minimum capital of Dh100m and at least 55 per cent of shares floated to the public.
Finance House, the investment bank and founding shareholder, chose to go ahead with the IPO despite difficult market conditions.
"The shareholders had to balance between a successful IPO or starting the company, and it seemed like it was not in their benefit to delay it further," Mr Maaitah said.
In the event that the offering is not fully subscribed on the day of listing, the country's stock exchange regulator can either extend the offer period or the company's founders can step in to underwrite what was not subscribed.
Wataniya Takaful, another new insurance firm, said yesterday that it planned to offer shares, valued at Dh82m, by April and list on the Abu Dhabi exchange.
The proposed IPO is in the final stages for regulatory approval.
