(MENAFN Press) The Initial Public Offer (IPO) of National Takaful Company ("Watania"), which opened on April 18 for subscription, closed yesterday (May 1st), receiving an overwhelming response from investors with the issue getting oversubscribed seven (7) times.
At the close of the public offer, applications for 590 million shares were received for the 82.5 million shares made available to the public.
Approximately twenty million shares, or 13.33% of the total share capital, were open only to UAE individual national retail investors and Sixty-two million shares were made available to UAE, GCC, and other retail and institutional investors.
Watania's founding shareholders, Abu Dhabi National Islamic Finance (ADNIF), Abu Dhabi National Insurance Company (ADNIC), Abu Dhabi National Energy Company (TAQA) and Aldar Properties (ALDAR) have subscribed to an aggregate value of AED 67.5 million shares, representing 45% of the total share capital of AED 150 million. The remaining 55% of the shares, valued at AED 82.5 million comprised the IPO.
"The strong public response to the Watania IPO represents a positive expression of public confidence in the future of Shariah-compliant insurance in the UAE and in the strength and credibility of the founding shareholders," said Aref Ismail Al Khouri, Chairman of the Watania founders committee.
"Watania will provide critical insurance support for all organizations participating in the realization of Abu Dhabi Vision 2030, and we believe Watania will play a major role in developing Takaful industry in the UAE through the introduction of reliable Shariah-compliant insurance solutions and through capacity building in this vital emerging sector."
UAE national retail investors were allowed to subscribe to 5000 shares with a guaranteed allotment of 2000 shares per application whereas UAE, GCC, and other retail and institutional investors could apply for a minimum of 10,000 shares, with additional subscriptions in multiples of 1,000 shares. The allotment will be made on a pro-rata basis for this tranche and the refund date has been set for May 15, 2011. The shares will be listed on the Abu Dhabi Securities Exchange (ADX).
"Investors have realized that Watania is a sound investment option due to tremendous growth opportunities in the UAE's takaful industry, highly experienced management team, robust business plan with unique products and services, and solid long-term affiliations with top rated international re-insurers. We are confident this IPO will re-ignite capital market participation in the UAE," said Mr. Al Khouri.
Islamic Insurance or Takaful penetration as compared to conventional insurance is lower in most GCC countries. Recent statistics reveal that Takaful gross contributions grew at Compound Annual Growth Rate (CAGR) of 83% between 2004 -2009 whereas conventional premiums grew at a CAGR of 25% during the same period.
Takaful gross contributions in the UAE are projected to grow at a CAGR of 30% between 2010 and 2014, outpacing growth in the overall insurance sector (CAGR of 17%) during the same period.
"We are confident of Watania's management capability to successfully implement its business plan. One of the company's key competitive advantages is the founders' technical expertise, track record of building successful businesses, and wide distribution channels. With such synergies, Watania is well positioned to become a leading player in the takaful market," said Ahmed Wahdan, the Head of equity capital markets at NBAD's Investment Banking Group.
The National Bank of Abu Dhabi (NBAD) was the financial advisor and lead receiving bank for this IPO.
"The selection of lead manager and receiving bank is critical to the success of the IPO and post listing price performance. We selected NBAD based on the credentials of Equity Capital Markets team, strong track record of involvement in public offerings, large distribution network, and wide range of investment banking products," Al Khouri explained.
"We would to thank NBAD for the valuable support services in executing this IPO. The Equity Capital Markets and Securities Services teams at NBAD's went the extra mile in their professional role to make this IPO a huge success. "