Empower’s IPO in Dubai begins on October 31

The next Dubai government-owned firm to go into IPO mode is the district cooling company Empower, which plans to offer 1 billion shares (10% of the capital) starting on October 31. Two of the previous three Dubai IPOs used book-building to determine the price range for the shares. The Salik road toll company was an exception, setting the cost at Dh2.
According to a public announcement, the Empower subscription period closes November 7. The minimum subscription amount for the retail investor tranche is Dh5,000, and those deemed professional investors can start from Dh5 million. (The shares have a nominal value of 10 fils.)
Recently, Empower said that in the event of an IPO, a minimum annual dividend of Dh850 million will be paid for two years through half-yearly instalments. “Dividends are one of the biggest highlights of Empower IPO,” said Junaid Ansari, Head of Investment Strategy & Research at Kuwait-based Kamco Invest. “The association with DEWA is surely helpful, and in addition, the long-term contract nature of revenues in the district cooling business gives visibility to future revenues and profits, assuring investors of future financial performance of the company.”
Empower confirmed that its offer price range will be announced October 31 ahead of the subscription process opening. Incidentally, DEWA holds 70 percent in the entity, which operates district cooling capacities in prime Dubai locations such as the Palm, Meydan, etc.
The plan post-IPO is to deliver ‘incremental growth by leveraging infrastructure at existing developments, to expand its network to nearby and adjacent developments’, the company said in a statement. As with DEWA, Empower’s credentials will build on the rapid expansion of the city’s real estate development as well as the resident base.
Another district cooling service provider, Tabreed, is already listed on the DFM. The Dubai Financial Market is up 6 percent year-to-date. 
Empower currently holds the title of the ‘world’s largest’ district cooling service provider, and in Dubai has a targeted share of around 80 per cent of the total connected capacity by end 2022. Its customer numbers total more than 110,000, a tally that includes those brought in by the recent acquisition of Nakheel and that of Dubai International Airport’s district cooling capacity.
The overall DCS sector in the emirate will likely grow from 25.6 per cent to 40 per cent by 2030. Dubai’s expansion of the urban areas will require more district cooling capacities being added in the medium-term. What that ensures is steady income growth for service providers. It would be interesting to see whether Empower has plans to go beyond the local market at any stage.
Otherwise, Empower will be kept occupied by ongoing, rapid growth in places like MBR City and new projects from companies like Nakheel.