Talabat drops in Dubai debut after region’s biggest 2024 IPO

🛵 Talabat, the leading on-demand delivery platform in MENA, made its highly anticipated debut on the Dubai Financial Market (DFM) this week, marking the largest global tech IPO of 2024.

Despite raising AED 7.5 billion ($2.04 billion) in an oversubscribed offering, Talabat’s shares closed 6.9% lower at AED 1.49, below the IPO price of AED 1.60.

⚙️ Breaking it down

Talabat, a unit of Delivery Hero SE, initially rallied 7.5% on launch day before reversing gains amid concerns over high valuations. Priced at a price-to-earnings ratio of 28x, significantly above the DFM benchmark of 9x, some market participants viewed the valuation as stretched.

The IPO offered a 20% stake, upsized from the originally planned 15% due to strong demand from anchor investors, including Emirates NBD, the Abu Dhabi Pension Fund, and Emirates International Investment Company. However, institutional and professional investors have since led the sell-off.

Delivery Hero’s stock also fell 12% in Frankfurt, reflecting broader concerns.

🐂 Wider IPO outlook

Retail investors accounted for only 5% of Talabat’s IPO, leaving institutional investors to drive price movements.

Despite challenges, Talabat’s market capitalization of AED 34.7 billion ($9.4 billion) remains close to its parent company Delivery Hero’s valuation of €9.2 billion ($9.7 billion).

🔮 Flashforward

Talabat’s GMV for the first nine months of 2024 reached $5.4 billion, a 21% year-over-year increase. Revenue rose 32% to $2.1 billion, and net profit jumped 72% to $271 million.

With Delivery Hero retaining an 80% stake in Talabat, its future growth remains pivotal for both companies.