ABU DHABI, (Reuters) – Gulf Arab investors offered 3.6 billion dirhams ($980 million) towards the initial public offering of an Abu Dhabi-based Islamic insurer, 43 times more than the firm was seeking, the IPO adviser said.
Mithaq Lil Takaful sold 82.5 million shares at 1 dirham each, equivalent to 55 percent of the company and valuing it at 150 million dirhams, Majd Maaitah, senior manager for securities services at National Bank of Abu Dhabi, told Reuters.
The nine-day sale closed on Feb. 4. The shares will list on the Abu Dhabi exchange at the end of March, Maaitah said on Thursday.
“The response was very good,” he said. Non-Gulf Arab citizens will be able to own as much as 25 percent of the shares once they list.
It was the first IPO in the United Arab Emirates in 2008, in one of the worst months for local markets, which have been spooked by fears of recession in the United States, the world’s largest economy.
Four days before the sale started, Dubai’s main stock index .DFMGI fell 6.21 percent, its biggest one-day loss since March 2006. Abu Dhabi’s benchmark .ADI plunged 6.8 percent that day and Saudi Arabia 10 percent, both a record.
Islamic insurance is a growth industry that is mirroring the expansion of Islamic finance.
“There is a huge demand for Islamic insurance or takaful in this region, and the new company is aiming to get a share of the pie,” Mithaq Chairman Abdulla Saeed al-Qubaisi told Reuters last month before the IPO.
“The insurance business is growing at 15 to 20 percent annually, and is projected to double by 2010,” Qubaisi said.
In Islamic insurance, or takaful, risk and reward is spread equally between the customer and the insurer, unlike in conventional insurance, where the insurer takes on all risk and receives a premium.