Stock prices of Talabat dropped following its initial public offering, making history with a $2 billion valuation.
Talabat, the leading on-demand delivery platform in the MENA region, made its debut on the Dubai Financial Market (DFM) today. The company raised AED 7.5 billion ($2.04 billion) in an oversubscribed offering, surpassing its initial target of AED 5.6 billion ($1.52 billion).
The IPO was the largest global technology IPO of 2024, marking a significant milestone for Talabat and the region's wider tech sector. The listing marked the start of an exciting new chapter for Talabat, as Tomaso Rodriguez, Chief Executive Officer of Talabat, commented: "Ringing the bell at DFM today on behalf of the entire Talabat team is the culmination of a two-decade journey of transformation."
Despite the successful IPO, Talabat's shares closed 6.9% lower at 1.49 dirhams on its first day of trading. This slight dip can be attributed to a combination of factors, including economic and market sentiment pressures, high valuation multiples, rapid IPO preparation, and general market dynamics.
Investors remained cautious due to the prevailing macroeconomic environment, notably global interest rate trajectories and geopolitical concerns impacting regional sentiment. Moreover, Talabat's valuation and sector metrics show elevated price-to-earnings and price-to-book ratios compared to sector averages, which might have contributed to some profit-taking or buying hesitation after the listing.
The IPO was executed within an unusually short timeframe of about four months, an intensity noted in industry commentary. While effective, this quick process might have left some investors cautious on near-term fundamentals or price levels.
The UAE equity market overall saw robust IPO activity in 2024, but investor appetite, while steady, is highly sentiment-driven rather than purely macro-driven. This suggests that the share price drop could reflect short-term sentiment corrections rather than long-term fundamentals.
Talabat reported impressive financial results for the first nine months of 2024. The company's General Merchandise Value (GMV) for the period was $5.4 billion, representing a 21% year-over-year increase. Talabat's net profit for the same period rose 72% to $271 million. The company's revenue for the period increased by 32% to $2.1 billion.
Investors will be watching Talabat closely in the coming months as the company navigates its new public status and continues to shape the on-demand delivery landscape in the MENA region.
[1] Emirates NBD, the Abu Dhabi Pension Fund, and Emirates International Investment Company were among Talabat's cornerstone investors.
[2] Delivery Hero, which owns an 80% stake in Talabat, saw its stock drop by almost 12% today.
[3] The stock opened at AED 1.7 and reached a high of AED 1.72 before closing at AED 1.49.
[4] The IPO was initially planned to raise AED 5.6 billion ($1.52 billion), but high investor demand led to the sale of 20% of Talabat's total share capital.
[5] Economic and market sentiment pressures, high valuation multiples, rapid IPO preparation, and general market dynamics contributed to the shares closing down by 6.9% on debut.
The IPO success of Talabat attracted significant investments from key players in the finance industry, such as Emirates NBD, the Abu Dhabi Pension Fund, and Emirates International Investment Company. Despite the impressive financial results reported by Talabat, its shares closed 6.9% lower on the Dubai Financial Market (DFM) due to a combination of factors including market sentiment, high valuation multiples, and rapid IPO preparation, impacting the business sector as a whole.
