UAE, GCC IPO pipeline looks healthy; family businesses could tap public market: experts

07/05/2025 01:28 AST

The UAE and Gulf Cooperation Council (GCC) initial public offering (IPO) pipeline is looking good with some family-owned businesses potentially going public in the coming years, industry players said at the Capital Market Summit in Dubai on Tuesday.

They pointed out that there is plenty of liquidity in the market looking to be parked, and some of it was reflected in the oversubscription of the IPOs in the UAE and region.

Fourteen IPOs hit the market in Q1 2025, raising $2.4 billion in proceeds, according to the EY MENA IPO Eye Q1 2025 report. When compared year-on-year to the Q1 2024 listings, the number of IPOs increased by four, with a significant rise in proceeds of 106 per cent.

"This year started on a positive note. Mena capital markets continue to show resilience, with the total IPO value more than doubling compared to the same period last year," said Brad Watson, MENA EY-Parthenon Leade.

Year-to-date, the UAE has seen the announcement of two listings of Alpha Data on the Abu Dhabi Securities Exchange and Dubai Holding announcing the listing of its REITs on the Dubai bourse.

Recent regulatory changes may encourage further real estate investment trust (REIT) IPO to list in Dubai," HSBC Bank said in the latest report.

We will see more and more family businesses tapping the public markets, mainly for governance," said Shehab Gargash, founder and chairman of Daman Investments and the managing director and group CEO of Gargash Group.

While speaking during the panel discussion, he noted that family businesses are not tapping the capital market now as "they are essentially funding themselves."

These companies need to figure out what is the best way of governance now because they are no longer a single shop, selling something or another in a small portal. They are big and sophisticated, an integrated and important part of the private sector," he said during the panel discussion at the Capital Market Summit in Dubai on Tuesday.

He also stressed that family businesses need to focus on the legacy aspect as well.

According to HSBC Bank, in 2024, Dubai accounted for 2.2 per cent of global IPO volumes and hosted the world's largest tech IPO of the year - for the on-demand food, grocery and retail delivery platform, Talabat.

The Dubai Financial Market provided investors with higher returns than the broader MSCI EM Index between 2016 to 2024, achieving a 4.9 annualised US dollar return compared to 2.8 per cent for the broader emerging markets index, it said.

Dubai has opened up new pathways for issuers and investors across equity and debt capital markets. IPOs have been enjoying strong demand, often record-breaking, while its leading DCM hub status is providing an expanding universe of issuers with comprehensive options to raise funding in both foreign and the local currency," said Samer Deghaili, co-head of investment banking, Middle East, North Africa and Türkiye, HSBC.

Structural developments, such as the introduction of stabilisation mechanisms and an increasing awareness from issuers of the dynamics between IPO valuations and aftermarket performance are key to continued success," he added.