Alef Education Holding plc, an AI-powered learning solutions provider based in Abu Dhabi, recently announced the price range for its initial public offering, set at Dh1.30 to Dh1.35 per share. This range suggests a market capitalization of between Dh9.10 billion ($2.48 billion) and Dh9.45 billion. The final offer price will be determined after the book-building process and is expected to be revealed on June 6, with shares set to commence trading on the main market of the Abu Dhabi Securities Exchange (ADX) around June 12. The IPO subscription period started on Tuesday and will close on June 4 for individual investors and June 5 for professional investors.
In terms of dividends, the company aims to distribute a minimum of Dh135 million to shareholders in 2024 and 2025, excluding Selling Shareholders. This implies a dividend yield of approximately 7.42% at the lower end of the price range and around 7.14% at the higher end. The CEO of Alef Education, Geoffrey Alphonso, expressed enthusiasm about the offering and emphasized the growth potential of the education technology sector, highlighting the company’s commitment to delivering long-term shareholder value through organic and inorganic growth strategies.
The IPO of Alef Education comes amidst a surge in IPO activity in the Arabian Gulf region, with significant offerings in Saudi Arabia and Dubai. Alef Education’s Shariah-compliant status, confirmed by First Abu Dhabi Bank, is expected to attract interest from local investors, especially in a market where parents prioritize spending on their children’s education. This is particularly relevant in Dubai, a desirable post-COVID destination that requires private schooling for expatriate children, potentially driving demand for the company’s stock.
Investors are likely to take note of Alef Education’s generous dividend policy, especially given the strong financial performance, strategic growth plans, and high regional demand for quality education. Valecha, Chief Investment Officer at Century Financial, emphasized the appeal of the company’s IPO, citing its solid cash conversion ratio and promising outlook in the expanding ed-tech market. Private school operator Taaleem Holdings, which went public in Dubai in 2022, experienced a similar initial dip in share prices post-listing but has since seen significant growth as profits increased with higher student enrollments.
Overall, Alef Education’s IPO presents an attractive investment opportunity in the education sector, leveraging advanced technology platforms and potentially tapping into the flourishing ed-tech market. Investors will be watching closely for the final offer price and subsequent performance, anticipating substantial growth potential and value in a sector that continues to evolve and expand rapidly.
