Talabat - Gulf's biggest IPO in 2024

Talabat Holding Plc, one of the Middle East's largest food delivery companies, raised $2 billion in the UAE's biggest initial public offering (IPO) this year, but its debut on the Dubai Stock Exchange was disappointing, Bloomberg reports.

Shares of Talabat - a unit of German company Delivery Hero SE - ended their debut session on December 10, down 6.9% at 1.49 dirhams ($0.41), after rising 7.5% during the day. The IPO price set by the parent company was 1.60 dirhams. The company's market capitalization is approaching $10 billion.

Tuesday's poor performance came despite an IPO that offered a significant 20% stake in the company amid strong demand from anchor investors. The public offering was the largest in the technology sector and the Gulf region in 2024, according to Bloomberg data.

Late last month, Delivery Hero decided to increase its stake to 20% from 15%, citing strong demand from international and regional investors. Emirates NBD Capital PSC, JPMorgan Securities and Morgan Stanley were the global coordinators for the offering. Abu Dhabi Commercial Bank, Barclays, EFG-Hermes, First Abu Dhabi Bank, Goldman Sachs, ING Bank and UniCredit were bookrunners in the transaction.

"Delivery Hero intends to retain a long-term indirect majority position in Talabat," the parent company said.

Talabat's IPO comes amid a wave of listings in the Middle East, where companies have raised about $10 billion in new share sales through 2024. However, some recent big deals have had weak debuts. Hypermarket chain Lulu Retail raised $1.7 billion in an Abu Dhabi offering last month, shortly after a $2 billion IPO by a division of Oman's state-owned energy company.

Founded in 2004 in Kuwait, Talabat operates in eight countries - the United Arab Emirates, Kuwait, Oman, Qatar, Egypt, Jordan, Iraq and Bahrain. The company has strengthened its position in the region, helped by Delivery Hero's acquisition of Indian company Zomato's food delivery business in the UAE in 2019 and online grocery platform InstaShop in 2020. The company had more than six million active customers as of September.

Delivery Hero first entered the Middle East in 2015, when it bought Talabat from German e-commerce group Rocket Internet, which had acquired it for about 150 million euros ($158.52 million) earlier that year.