Qatar takes GCC’s first IPO in 2017
* Investment Holding Group (IHG) will offer 9.8 million shares at a price of QAR10.1 per share
* This is the first IPO by a family business in Qatar
* This IPO is third new listing on Qatar’s bourse since 2010
A construction firm in Qatar has announced that it has got approval to go public next week in what could be the first initial public offer (IPO) in the GCC region in the new year.
Family-owned contracting and trading business, Investment Holding Group (IHG), will offer 9.8 million shares, or 60 per cent of its capital, at a price of QAR10.1 per share, the company said in a statement late on Sunday. That would make the value of the offer roughly QAR503m ($138m).
The announcement comes just after getting over a disappointing year for IPO markets, which saw little activity in the region and across the globe.
There were no IPOs in the third quarter of 2016, which was comparable to the same period in the previous year.
The IPO of the holding company, which through its subsidiaries provides contracting, shipping, real estate and education services, is also the third new listing on Qatar’s bourse since 2010.
The shares will be offered through Commercial Bank between January 8 and 22 to Qatari citizens and companies.
The IHG offer also marks the launching of the first-ever IPO by a family business in Qatar.
While state firms developed the energy sector in Qatar and other Gulf Arab countries, family-run businesses built much of the rest of the regional economy. They generate more than 80 per cent of non-oil gross domestic product in the six-nation Gulf Cooperation Council, consultants PwC estimated.
Families have often been reluctant to take their companies public for fear of losing control and because of concerns about how the Gulf’s illiquid markets would value their shares.
But pressure to go public has been increasing; regulators want family businesses to list in order to deepen the markets and listings can help the firms cope with increasing competition and the challenge of raising money in an era of low oil prices.
Ghanim al-Hodaifi, chairman of IHG’s board of directors, said an IPO was an opportunity for Qatari family businesses to “to improve the management of share capital” and expand their shareholder bases.
(With inputs from Reuters)