IPO Frequently Asked Questions
For a question on IPO you can search our FAQ section below.
1.What is an IPO?
An IPO is an ‘Initial Public Offering’, where a company, for the first time, offers its shares to the public for subscription and lists them on a stock exchange, e.g. Muscat Securities Market (MSM).
2.Why is Al Ahlia Insurance Company proceeding with an IPO?
There was a Royal Decree issued by His Majesty which made it mandatory for all Insurance companies registered in Oman to become publicly listed companies. In order to comply with the Royal Decree, Al Ahlia Insurance Company is proceeding with the IPO.
3.What is the size of the IPO and what is the subscription period?
IPO size: At the offer price of Bzs 300 per share, the size of the IPO comes to OMR 7,500,000
IPO opened for subscription on 4 July 2017 and will close on 2 August 2017
4.What is the basis for determining the Offer Price at Bzs 300 per Offer Share?
The share price is determined by various qualitative and quantitative factors. The key underlying strengths of the investment include:
- Experienced founders with a proven track record
- Robust business model built on operational excellence
- Solid growth plans to counter current challenging environment
- Consistent profitability backed by a strong balance sheet
- Visibility of returns to investors in the form of consistent dividends
While the Offer is priced at a premium to the nominal value, it is important to note that since the Company was incorporated in 2004, the book value per share has since grown to Bzs 376 at the end of March 2017.
At the Offer Price of Bzs 300 per share, the Price to Book ratio of the Company works out to 0.80 times based on the book value per share (BVPS) as on 31-Mar-2017. This translates into a discount of c.43% to the average Omani insurance companies of 1.4 times BVPS and a discount of c.68% to the average regional insurance companies of 2.5 times BVPS.
In addition, at the Offer Price, the Company is offering an attractive average dividend yield of 9.3% for the next four years. The average dividend yield for the next four years for the Company compares favorably to the average dividend yield of 4.0% for Omani insurance companies and 2.8% for the regional insurance companies.
For more details, please refer to Chapter 14 of the Prospectus.
5.What is the process to subscribe / apply for the Offer Shares?
You need to have an MCDC number to apply for the Offer Shares. With the MCDC number you need to fill in the application form and submit the application form along with the subscription amount to one of the collecting banks as mentioned in the prospectus. Please refer to Chapter 19 of the prospectus for further details. A copy of the prospectus is available at CMA’s website as well as the branches of all the collecting banks.