Talabat IPO sees strong demand, valued up to $10.2 billion

Books for Talabat’s IPO have been fully subscribed within the price range of 1.50 dirhams ($0.41) to 1.60 dirhams, according to deal terms reviewed by Bloomberg News. The offering involves a 15% stake, or 3.49 billion shares, from its parent company.

Talabat IPO sees strong demand, valued up to $10.2 billion

At the top of the range, Talabat is valued at $10.2 billion, slightly below Delivery Hero’s $11 billion market capitalization. This valuation also falls short of earlier estimates: Emirates NBD, one of the IPO’s underwriters, had projected a value of up to $14.4 billion, while Bloomberg Intelligence estimated an enterprise value as high as $12 billion. “This may signal a focus on ensuring strong post-IPO performance,” commented Clement Genelot, equity analyst at Bryan Garnier. “Delivery Hero aims to use the proceeds to deleverage its balance sheet and encourage the market to reassess its sum-of-the-parts valuation.” The valuation range represents a nearly 40% discount compared to non-European peers, higher than the 25%-30% discount anticipated by Genelot's firm. Strong post-IPO performance by Talabat could prompt investors to adjust their valuation framework for Delivery Hero, he added.

Challenging period for Gulf markets

Talabat’s IPO comes amid a challenging period for Gulf markets. Lulu Retail raised $1.7 billion in Abu Dhabi last month, shortly after Oman’s state energy company listed a unit for $2 billion. Both offerings struggled: Lulu’s shares ended flat on debut, while the Omani unit closed 8% below its offer price. The final pricing for Talabat will be announced on November 29, with trading set to begin on December 10.