DUBAI: Talabat Holding Plc, the Middle Eastern subsidiary of Delivery Hero SE, recently made headlines by raising over $2 billion in what has become the largest initial public offering (IPO) within the technology sector for 2023.
Despite these impressive figures, the stock’s trading debut, on Tuesday on Dubai Financial Market (DFM), illustrated the volatility and uncertainties often inherent in public markets, as shares initially surged but eventually fell by over 7.5 per cent within minutes of trading.
Pricing its shares at the upper end of the marketed range at AED1.60, Talabat’s stock opened at AED1.70 and briefly climbed to AED1.72. However, just after the initial surge, the share price declined, indicating the challenges that accompany new listings even in a market characterised by an active appetite for IPOs.
The fluctuation reflects a broader trend observed in recent market performances, where even well-anticipated listings such as Lulu Retail Holdings Plc and Oman’s OQ Exploration & Production have faced tepid responses from investors.
Thriving regional market
Despite the early trading setback, Talabat’s market capitalisation reached approximately AED34.7 billion, making it closely comparable to the valuation of its parent company, Delivery Hero, which saw its own shares drop by 11 per cent in Frankfurt.
These price movements underline the interconnectedness of market perceptions within global financial ecosystems, particularly when consumer behaviour is pivoted towards technology-driven services.
The context of Talabat’s IPO is underscored by a thriving regional market, where more than $12 billion has been raised through IPOs in 2023 alone. The demographic growth in urban centers like Dubai continues to create opportunities for consumer-facing companies, bolstering investor interest.
The UAE-based food delivery giant operates across eight countries, enhancing its competitive edge particularly after significant acquisitions aimed at consolidating its position within the market.
The success of Talabat’s IPO can be attributed, in part, to robust demand from global investors, evidenced by increased share offerings that raised the stake from an initial 15 per cent to 20 per cent, driven by substantial anchor orders.
