x Abu Dhabi, UAESaturday 22 July 2017

Damas becomes DIFX pioneer

The jewellery and watch retailer will become the first retailer to trade on the Dubai International Financial Exchange.

The Damas Jewellery Shop in the Gold Souk, Diera. The company will become the first retailer to trade on the DIFX.
The Damas Jewellery Shop in the Gold Souk, Diera. The company will become the first retailer to trade on the DIFX.

The jewellery and watch retailer, Damas International, announced that the pricing for its shares will be US$1 (Dh3.67). The company will become the first retailer to trade on the Dubai International Financial Exchange (DIFX) next Tuesday. Damas plans to float 28 per cent of its shares in its bid to raise up to $311 million for expansion. Last month, it said it would price the shares at between $1 and $1.14 each. If it is able to garner enough demand for the upper price level of the shares, it would value the company at $1.1bn and float at a price to earnings multiple of 20. Based on this multiple, Damas would be priced comparably to Tiffany, the New York jeweller.

The offering of 270.58 million ordinary shares received "strong interest" from institutional investors from the Gulf region and Europe, Damas said yesterday. "The introduction of new capital will ensure we can accelerate our growth plans," the company's chief executive, Tawhid Abdullah, said. The family-controlled retailer operates 438 stores in 18 different countries. HSBC Bank and Credit Suisse Securities have 30 days from the listing date to exercise an over-allotment option of up to 15 per cent of the total shares sold in the initial public offering (IPO), or 40.59 million shares.

If the full option is exercised, Damas will raise $311m. Damas said its market capitalisation, excluding the over-allotment option, would be $968.6m. The Damas IPO represents 28 per cent of the enlarged share capital of the company, including 86.4 per cent of new shares and 13.6 per cent of secondary shares being sold by Amwal al-Khaleej Commercial Investment. The founding family of Damas did not choose to sell any shares in the IPO.

Family-owned companies like Damas are increasingly looking to the DIFX to list because they can retain control of their businesses. Damas would be the fourth primary listing and first retail company to trade on the DIFX, set up in 2005 to operate according to international standards of accounting and financial reporting. Last month, Netsol Technologies, a business software company, became the first American public company to list and trade on the DIFX, as well as the first stock to trade since the $432m flotation in April of Depa, the Dubai-based interior contractor.

The Damas group operates in 18 countries, with 438 stores worldwide. Revenues at Damas hit Dh3.54bn last year, while it earned a profit of Dh209m. * with Reuters @Email:vsalama@thenational.ae