RAK Properties AED1.1 billion IPO oversubscribed 57 times

This left the AED1.1 billion issue 57 times oversubscribed, according to data released by the IPO's Subscription Manager, the Investment and Development Office of the Government of Ras Al Khaimah, and Lead Bank, National Bank of Abu Dhabi (NBAD).

In order to ensure strong small investor participation and fair allocation of shares, two classes of subscription were made, 200 million shares for small investors and 900 million for others. Just over 34 per cent of subscriptions in Category A shares were allotted to investors applying for amounts between AED20,000-AED100,000, while 1.47 per cent of subscriptions for the remaining 900 million Category B shares in the issue, for amounts of AED101,000 or above, were successful.

"His Highness Sheikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, ordered that the share allocation process, for 55 per cent of the company, should be fair to all. This has given small investors their first chance in a UAE IPO to gain a sizeable percentage of the offering," said Izzat Dajani, Chief Executive of the Government of Ras Al Khaimah's Investment and Development Office. The remaining 45 per cent of the AED2 billion company is held by founding shareholders and the RAK Government.

Open to UAE and GCC investors, as well as expatriates, the IPO is the latest step in the emirate's drive to capitalise on freehold real estate and tourism. The company aims to develop island, coastal and inland areas over the next decade and has already scored a notable success with the AED1 billion Al Hamra Village project, 20 kms down the coast from the emirate's main population centre.

The IPO raised AED62,558,987,920, with a total of 22,095 individual subscriptions. Small investor subscriptions, made by 20,193 investors, totalled AED593,335,610, while 1,923 large investor subscriptions totalled AED61,965,652,310.

In the small investor category, 15,338 applications were made for AED20,000, the minimum possible subscription amount, or 69 per cent of subscriptions made, while 1,348 applications were received for AED100,000, the maximum allowed, or 6 per cent of the total in the category.

In the large investor category, for subscriptions of AED101,000 or more, 157 applications were received for 1 million shares, 66 for 2 million, 58 for 10 million, 28 for 20 million, 22 for 40 million, 20 for 80 million, 40 for 100 million, 17 for 900 million and 3 for 1 billion. The IPO continued a trend in UAE stock markets in which several have been oversubscribed by at least 40 times.

NBAD officials, who are working closely with the IPO's auditors, KPMG, said the share allocation process was expected to be completed in the next few days. Share notifications will soon be prepared and sent to new shareholders, as well as cheques for oversubscriptions, which will be returned. Registered mail will be sent to postal addresses listed on applications.

"We are reaching the final stages of preparation of the shareholders' list. NBAD is working with the Investment and Development Office of the Government of Ras Al Khaimah and banks participating in the IPO to return oversubscriptions to subscribers as quickly as possible, as directed by His Highness The Crown Prince," said Majd al Maaytah, Manager of NBAD's Securities Services Department.