Talabat plunges over 7.5% in Dubai trading debut after $2bn IPO

Talabat shares plunged by more than 7.5 per cent on its trading debut on the Dubai Financial Market (DFM). The delivery platform raised $2bn (Dhs7.5bn) in its initial public offering (IPO), which was the largest listing in the tech sector and the GCC region this year.

The company’s shares opened at Dhs1.70, higher than the price at which Germany’s Delivery Hero sold 4.7 billion shares last month. However, the stock gave up gains of as much as 7.5 per cent to trade 4.4 per cent lower at Dhs1.53 ($0.42) on its first day of trading in Dubai.

Delivery Hero boosted the size of Talabat’s IPO to 20 per cent due to significant investor demand. Initially, the company planned to raise $1.52bn (Dhs5.6bn) by offering a 15 per cent stake in Talabat.

Talabat’s IPO was priced at Dhs1.60, which was at the top end of a marketed range. The rally gave the company a market capitalisation of about Dhs37bn.

The company’s IPO attracted three cornerstone investors: UAE Strategic Investment Fund, Abu Dhabi Pension Fund, and Emirates International Investment Company, which agreed to subscribe for shares worth as much as Dhs918m.

“Ringing the bell at DFM today on behalf of the entire Talabat team is the culmination of a two-decade journey of transformation, marked by ambition, innovation and a passion for serving and delivering to the region that delivers,” said Tomaso Rodriguez, the CEO of Talabat.

“Today marks the start of an exciting new chapter for Talabat and the region’s wider tech sector, and we are delighted to welcome new shareholders to our ambitious roadmap for the future.”

Founded in 2004 in Kuwait, Talabat has expanded to serve customers in the UAE, Oman, Qatar, Bahrain, Jordan, Iraq and Egypt, with more than 65,000 active partners as of the end of September 2024. It reported $6bn in gross merchandise volumes in 2023, up from just under $4bn in 2021. Free cash flow surged by 64 per cent year-on-year to $226m in the six months ended June 2024.

The delivery firm joins a wave of private company listings in the Middle East this year. IT services firm Alpha Data is considering listing in Abu Dhabi. The GCC region has continued to be a busy hub for new share sales, with firms raising more than $12bn through IPOs in 2024.

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