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Dewa: A focus on the Middle East’s second largest IPO

Dubai-based energy services company DEWA, for Dubai Electricity & Water Authority, has just made a splash on the financial markets. The listing was accompanied by a 75% jump in the company's net profit, against the backdrop of rising electricity demand in the emirate.

Within hours of DEWA’s listing on the Dubai Financial Market, the Dubai Stock Exchange, the company’s shares had already risen in value by 23 percent. A considerable increase for this energy giant with a market value of around $39 billion.

In fact, this is the biggest IPO in the Gulf region – Europe as well for that matter – since that of Saudi oil megalodon Aramco. The company, which provides electricity and water services to the UAE, has already earned some $6.1 billion since the day of the IPO.

“The strong interest we have seen from institutional and retail investors reflects the confidence in Dewa as a leading global utility company. We are proud to be able to offer investors the opportunity to be part of Dewa’s future as it supports Dubai’s growth and energy transition,” said Saeed Al Tayer, the company’s chief executive officer.

A key national player

Is it DEWA’s positioning, with a strong focus on sustainability and smart solutions, or the nature of its business, which is simply indispensable to the day-to-day life of a rapidly growing region, that has made it so successful? While it is difficult to answer with certainty -spoilers: it is probably a bit of both-, it is interesting to note that Dewa has overtaken Emirates NBD, Dubai’s largest bank, which prior to its listing weighed 23.63% in the general index of the local stock market, with a market capitalization of Dh92.85 billion.

Dewa is the first of 10 UAE state-owned companies to be listed on the Dubai Financial Market, as part of Dubai’s strategy to increase the size of its capital market to Dh3 trillion. In November, the emirate also announced plans to create a Dirham 2 billion fund to encourage the listing of more private companies in sectors such as energy, logistics and retail.