Final price set at $1.30 per share
DPW IPO Oversubscribed by 15x
25% of the shares will be alloted to Sukuk holders
10% of shares to retail investors
3500 shares to each retail investor and pro-rata after that.
23% of total DPW shares offered in IPO (or 3.818 bn out of a total of 16.6 billion shares)
IPO funds received = 15 x $1.30 x 3.818 billion = $74.5 bn (or AED 273 bn)
IPO proceeds after refunds made = $4.96 billion.
DPW share allotment
If you handed over the minimum $6000, then you'll get 3500 shares for which you'll pay $4550. The remainder will be allocated pro-rata but considering that only 10% are allocated to retail investors, I wouldn't expect to see very many. I don't see a number for how many retail investors applied, which would help with the calculation
DPW profit out of IPO
Refunds to be made Sunday 25 November 2007 (bank transfer or check depending on original payment method). Since IPO closed on 15 Nov, that means DPW had 273 bn dhs in the bank earning interest for 10 days - say 14 days at a rough estimate of the average amount over the IPO period.
If we allow for 5% interest on deposits, that's about AED 0.52 billion worth of interest they've collected. Or AED 520 million / $143 million. That's not far off DPW profits for 2007 H1 of AED 622 m.
And now they've got $5 billion (AED 18.4 bn) from the IPO earning interest at the rate of $250m (AED 918m) per year, even if they do nothing.
Shift a few million containers, or a few boxes of IPO subscriptions. Works out to the same profit either way in the end
Dubai World today announces it has priced shares in the initial public offering (IPO) of its global marine terminal operator DP World (DPW) at $1.30 per share - the top of its indicative range of $1.00 -$1.30 per share, implying a market capitalisation for DP World of $21.6bn.
Twenty-three percent of the shares of DP World, amounting to 3,818.0 million shares, comprised of 3,245.3 million shares plus up to an additional 572.7 million shares available through the greenshoe over-allotment option, was offered globally by its sole shareholder, Dubai World subsidiary Port & Free Zone World (P&FZ World), to international institutional investors, and in the UAE to retail investors. A portion was also allocated to holders of the PCFC convertible Islamic bond, or sukuk, that was issued in January 2006.
Including the greenshoe, the proceeds of the IPO amount to $4.96bn, making it the largest IPO ever in the Middle East.
The IPO opened on 4 November 2007, with the UAE retail offer closing on 15 November 2007 and the institutional offering closing on 20 November 2007. The deal has been more than 15 times oversubscribed.
Excluding 25% of the shares expected to be allocated to sukuk holders, approximately 10 percent of the shares offered will be allocated to retail investors, with the rest to institutional investors. Accepted applicants in the UAE retail offer will receive a minimum allotment of 3500 shares with allocation pro rated thereafter.
Chairman of Dubai World and of DP World, Sultan Ahmed Bin Sulayem, said: "We are delighted with the response to the IPO and pleased so many investors want to share in the future of DP World. The fact the IPO has been so heavily oversubscribed reflects the market's confidence in the business, its management, and the company's potential in the future."
'There was strong demand for the shares internationally amongst institutions, similar to that we experienced with our bond and sukuk issues in June, and DP World will have a solid base of international investors who are looking to grow value over time. Orders were particularly strong from institutional investors in the UAE and in the US and Europe.
But importantly, we also saw strong demand from retail investors throughout the UAE, and Dubai in particular, and from both UAE residents and other GCC nationals. We said when we launched the IPO earlier this month that we were keen investors in our home market participated in DP World's future. The allocation we have agreed on will see all those whose applications were accepted receiving at least 3500 shares."
'We believe the combination of price and allocation strikes a good balance between stability and liquidity for the secondary market.
This is an important step for Dubai World and for Dubai. We look forward to sharing our success with shareholders into the future.'
DP World Executive Vice Chairman and Group CEO of P&FZ World, Jamal Majid Bin Thaniah said: 'DP World is one of the world's foremost marine terminal operators both in scope and scale. It has an exciting future, and will seek to continue to grow and prosper for the benefit of its shareholders, both retail and institutional. Efficient infrastructure is the backbone of every national economy, and with operations now in 22 countries, DP World is well placed to contribute to the further growth of world trade.'
DP World CEO Mohammed Sharaf said: 'We would like to thank all those who gave us their vote of confidence by applying for our shares. We will work hard to continue to earn the confidence of our shareholders at home and overseas. Ours is a strong business in a thriving industry. We will continue to expand, looking for opportunities that create value for both our customers and our shareholders over time.'
The shares are expected to be listed on the Dubai International Financial Exchange (DIFX) on 26 November.
I know for a fact that institutional buyers did not have to deposit their money in advance. They had to pay only the moment they were allocated shares, i.e today or tomorrow at the latest.
I don't see a number for how many retail investors applied, which would help with the calculation
Hi SW, aint sure about the accuracy of the source; but there was an article in GN dated 19 Nov, claiming that around 67,000 retail investors applied for the IPO.
... around 67,000 retail investors applied for the IPO...
Yes, that rings a bell now. And we can do some further calculations.
67,000 investors x 3,500 shares (minimum allotment) each = 234.5 million shares
10% of IPO = 318 million shares
318m - 234.5m = 83.5m shares to be pro-rated amongst the 67,000 investors. We don't know how many times the retail portion was oversubscribed by, but we'll take the 15x from DP World overall as a ball park figure.
15 x 318m = 4.77 billion shares applied for.
4.77 bn less the 234.5m shares minimum issue = 4.5355 billion
So the additional amount will be 83.5m / 4535.5 m = 0.018, or 1.84% of whatever was applied for, after taking off the 3500 shares minimum.
For example (with two different ways of calculating the outcome).
1. You applied for $6000 worth - the minimum payment required.
You'll get 3500 shares costing $4550. The remaining $1450 is equivalent to an application for another 1450 / 1.30 = 1115 shares and you'll get 1.84% of that or 20 shares, for a total of 3520 shares.
2. You applied for $100,000 worth.
At a share price of $1.30, you've applied for 76,923 shares in DP World.
You'll get 3500 shares + 1.84% of 73,423 = 3500 + 1352 = 4852 shares.
And so on.
Of course those calculations depend on two numbers which could vary substantially - the number of applicants, and the number of times the retail section was oversubscribed by.
juzer wrote:
I know for a fact that institutional buyers did not have to deposit their money in advance.
A fact?
I recall the Business Breakfast had someone on the show last week talking about that - although it sounded like no-one had to pay in advance.
Of course, that means my first post estimate of net profit for DPW out of the surplus IPO funds is optimistic. By how much, is a job for another day... _________________ UAE IPO list | posting guidelines
Some questions though, Anyone got an idea about how we will get our money back?
Above it states, either a cheque or transfer, according to the payment form.
So I paid using a Manager cheque and i paid to Emirates bank... so what should i do?
Another question about maturity of stocks "i might not be accurate as i'm not an expert in this" I heard that dubai ports and nakheel employees get 100% allocation and some of them got 1 million shares cupons that they can't sell till maturity.
Any info?
Sorry for not being specific, but i'm trying to learn, i'm still a newbie.
Some questions though, Anyone got an idea about how we will get our money back?
I guess if you paid by cheque, a refund cheque will be posted to you. If you did a transfer, they'll transfer the refund back to your account.
Who wrote this:
So I paid using a Manager cheque and i paid to Emirates bank... so what should i do?
Wait .
Sorry, can't help you on the second question, I haven't heard anything about that, only the sukuk holders getting 25%. It's possible though, in some previous IPOs, certain sectors have received a greater allotment. _________________ UAE IPO list | posting guidelines
1. You applied for $6000 worth - the minimum payment required. You'll get 3500 shares costing $4550. The remaining $1450 is equivalent to an application for another 1450 / 1.30 = 1115 shares and you'll get 1.84% of that or 20 shares, for a total of 3520 shares.
SW can you please explain where you got the figure of 3,500 shares alloted to each retail investor? From my understanding you were only guaranteed US$2,000 or 1,538 shares and the rest after that would be pro-rata?
SW can you please explain where you got the figure of 3,500 shares alloted to each retail investor?
Dubai World press release 21 November 2007 wrote:
Accepted applicants in the UAE retail offer will receive a minimum allotment of 3500 shares with allocation pro rated thereafter.
Full DP World press release in the first post . DP World appear to have changed the minimum - The $2000 figure you have was in the original DP World prospectus. The IPO level was increased to 23%, perhaps to cover the increased minimum allotment amount. _________________ UAE IPO list | posting guidelines
1. $6000 worth of shares applied for - the minimum required.
Receive 3500 shares costing $4550. The remaining $1450 is equivalent to an application for another 1450 / 1.30 = 1115 shares and you'll get 4.76% of that or 53 shares, for a total of 3553 shares.
2. $100,000 worth of shares applied for.
At a share price of $1.30, you've applied for 76,923 shares in DP World.
You'll get 3500 shares + 4.76% of 73,423 = 3500 + 3496 = 6996 shares. _________________ UAE IPO list | posting guidelines
I applied for AED 20,000 worth of shares & got alloted 3842 shares.
Haven't received my refund though ....
And can't understand why my allotment appears be more than the expected amount ...
Hope the berks haven't made a mistake & credited my refund to someone else & someone else's allotment to me. They deducted the application amount twice in my case, although one transaction was then automatically reversed after two days.
SW I have applied for AED 100,000/= and the allotment of 3989 shares.
I couldnt get the calculation... can you please help..
3500 x $1.30 x 3.67 = AED 16,698.50
AED 100,000 - AED 16,698.50 = AED 83,301.50
3989 - 3500 = 489 shares over allotment
489 x $1.30 x 3.67 = AED 2,333.02
2,333.02 / 83,301.50 = 2.8%
I don't get it either now . And Sid's allotment yesterday is way off my calculations.
Sid wrote:
I applied for AED 20,000 worth of shares & got alloted 3842 shares.
20,000 - 16,698.50 = AED 3,301.50
342 shares x $1.30 x 3.67 = AED 1,631.68
1,631.68 / 3,301.50 = 49.4% over allotment proportion.
Obviously you've received notification of those amounts so you'd assume that's correct. Which means I'm doing something wrong with my calculations, or I've made some wrong assumptions . _________________ UAE IPO list | posting guidelines
Thanks for your help.
but I dont feel very good about DP world calculations, because I have came to know that there have been some manual allotments as well. (one confirmed news they have alloted 50% of application amount to one company )
From what I gather - there is a percentage difference between investors who applied in USD and AED. A friend of mine applied for 14,000 USD worth of shares and received 3,900 shares.
I have been alloted 3842 shares. does this mean that i will be getting refund of $1005 dollar.
further can any one tell me
where we can check the daily rates of DPW shares.
Have you (like me) applied through Mashreq Securities? And what amount did you apply for?
Maybe as aekpani says, there has been some manual adjustments with Securities firms getting blocks of shares, which they have then alloted using their own formulas?
Once DP World is listed, its rates can hopefully be seen at:
I have been alloted 3842 shares. does this mean that i will be getting refund of $1005 dollar.
Depends on how much you paid initially?
I will try and get share price information on the DP World page, but so far I'm still waiting for a reply to a request I sent to DIFX. I'm not holding my breath ... _________________ UAE IPO list | posting guidelines
That's the exact same figure that I got too. Somehow this entire thing is not as transparent as it should be. Don't know if we'll be able to make much headway asking for a clarification from Mashreq Securities.
How are we allocated the shares? I am confused. Applied for 25000 AED and 25000 AED in two seperate accounts. I just got the sms stating that i have recieved 3851 shares.The same number of shares for both the accounts.
Anyone mind helping me here?
I think I've understood the way the allocation formula works.
In Dirhams, the minimum application amount was AED 20,000.
All people who applied for AED 20,000 have been alloted 3,842 shares.
Any person applying for amounts in excess of AED 20,000 is alloted 9.1875 shares for every AED 5000 of application amount in excess of AED 20,000.
So to find out the alloted number of shares:
(1) Deduct AED 20,000 from the actual application amount
(2) Divide the remainer by 5,000 & then multiply by 9.1875
(3) Add 3,842 to the result.
So, in the case of Salik:
25,000 - 20,000 = 5,000
5,000 / 5,000 x 9.1875 = 9 (rounded)
Alloted number of shares = 3,842 + 9 = 3,851
In the case of Aekpani:
100,000 - 20,000 = 80,000
80,000 / 5,000 x 9.1875 = 147
Alloted number of shares = 3,842 + 147 = 3,989
In the case of Brutus455:
200,000 - 20,000 = 180,000
180,000 / 5,000 x 9.1875 = 331 (rounded)
Alloted number of shares = 3,842 + 331 = 4,173
1. I forgot to say welcome to some new names on here. Sorry ... and welcome to tk, kazimi, aekpani, yasha, juzer, and salik. Good to see more and more contributers joining in the discussions .
2. I'll throw the numbers from this topic into a spreadsheet and see if I can figure out a formula. I don't see an obvious pattern though, not with allotment percentages ranging from 2% to almost 50% .
3. That post about Rasmala institutional customers getting 0 shares deserved it's own topic and headline so I split it off this one....
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. And Sid's allotment yesterday is way off my calculations.
... and welcome to tk, kazimi, aekpani, yasha, juzer, and salik. Good to see more and more contributers joining in the discussions 