Salik, Dubai’s toll gate operator, plans to raise AED 3 billion in its initial public offering, also called an IPO, and the share price is set at AED 2 per share, with 1.5 billion shares going on for sale.
That stands at about 20 per cent of the company’s issued share capital on offer, with the Dubai government reserving the right to increase the size of the offering at any time before or after the subscription period ends.
The plans comes as Dubai is trying to boost the market capitalization of its local stock market, following DEWA and tecom Group on the Dubai Financial Market.
For many, the Salik IPO is the most enticing yet.
How to invest in Salik
If you want to invest in Salik, you can invest starting today and ending September 20, or 21 if you’re a qualified investor.
To invest, head to Emirates NBD, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank, Mashreq Bank, MBank and Sharjah Islamic Bank, as each of those banks are offering shares.
Dividends are planned for April 2023 for the second half of 2022, with a planned 100 per cent of the net profit except for legal reserves.
Salik weighs ‘dynamic pricing’ which could increase revenues
alik has a potential plan in place to deal with congestion in Dubai’s roads—dynamic pricing—or surge pricing that will spike tolls during rush hour, in certain lanes, and at the busiest times in the day.
“The Roads and Transport Authority (RTA) could implement dynamic pricing through optimising the toll rates depending on the time of the day, for example, by charging a higher toll fee for specific lanes or during peak hours,” the company said in its IPO announcement.
Dubai’s Salik wouldn’t be the first to implement such a plan—that’s already how it works in Dallas, Texas and in Singapore.
“Currently, we have fixed a fee of AED 4 for Salik. But there are other dynamic systems around the world that charge more during peak hours than off-peak hours. That is called dynamic pricing. This is based on a transportation study that will be conducted by the RTA and Salik to achieve the common goal of seamless transportation in the emirate. All this will be subject to approval from the Executive Council of Dubai,” said Abdul Muhsen Kalabat, vice-chairman of the Salik Board of Directors.
Salik’s big move towards IPO in Dubai
Salik is currently doing studies to decide the best plan of action. Back in June, Dubai said that toll gates may be removed or modified deepening on the Chairman of the Executive Council of Dubai.
Mattar Al Tayer, chairman of the company, said any increase in the number of gates or tariffs would be based on studies that are conducted by the RTA and the company. The Executive Council of Dubai will take a final decision in this regard.
“New toll gates can also be added subject to a decree issued by the Chairman of The Executive Council of Dubai, and after RTA conducts a comprehensive traffic study in coordination with Salik,” the Executive Council of Dubai added
The firm is aiming to raise around $1 billion with its first IPO, or 20 per cent of the company.
The company currently has a whopping three million registered vehicles that pass through, with 1.8 in Dubai alone. There are eight toll gates under operation. Tehre are plan for more gates coming in the future, but gates typically take around nine to 10 months.