Dubai Taxi Company’s landmark IPO offers over 620 million shares

Equivalent to 24.9 percent of total share capital
Dubai Taxi Company’s landmark IPO offers over 620 million shares
Dubai Taxi Company offers shares to retail and professional investors

Dubai Taxi Company (DTC) has announced its plans to list 624.75 million shares on the Dubai Financial Market (DFM) through an initial public offering (IPO). The shares represent 24.9 percent of the company’s total share capital. All that will be offered are existing shares of the Department of Finance for the government of Dubai.

DTC, established in 1994, is a subsidiary of Dubai’s Roads & Transport Authority. This month, UAE Prime Minister and Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum issued Law No. (21) of 2023. This formally recognizes the entity as a public joint stock company. 

Dubai Taxi Company IPO details

The DTC IPO consists of two parts. The first tranche is the UAE Retail Offering and will be open to retail investors and other investors in the UAE. They will have access to 62.47 million shares. The second tranche, the Qualified Investor Offering, is for professional investors across various countries. 562.27 million shares will be available.

As part of the second tranche, 5 percent of the share will be set aside for the Emirates Investment Authority (EIA). Another 5 percent will be reserved for the Pensions and Social Security Fund of Local Military Personnel. 

The subscription period will open on November 21, the same date when the share price range will be announced. For first-tranche subscribers, the closing date is November 28, and November 29 for second-tranche subscribers. The final offer price will be determined through a book-building process. 

Meanwhile, completion and admission to the DFM will be in December 2023, subject to regulatory approvals and market conditions.

Following the IPO, DTC plans to pay dividends biannually starting from the fiscal year 2024, with a minimum of 85 percent of annual net profit available for distribution. This prudent dividend policy reflects the company’s expectation of strong cash flows and sustained long-term earnings.

Dubai Taxi Company IPO

Market leader

Since its launch, DTC has evolved into the city’s leading comprehensive mobility solutions provider. It commands approximately 44 percent of the market share in terms of taxi fleet as of June 2023. Operating in taxi services, VIP limousine services, bus services, and last-mile delivery, the company made 44 million trips between July 2022 and June 2023.

“Benefitting from Dubai’s exceptional infrastructure and an ambition to double the size of its economy by 2033, supported by the Dubai Urban Master Plan 2040 which maps out a comprehensive plan for sustainable urban development in the emirate, Dubai Taxi Company remains key to the growth, mobility and sustainability vision of Dubai,” stated Abdul Muhsen Ibrahim Kalbat. He is the chairman of DTC’s Board of Directors.

According to him, the company is “playing an integral role in moving and connecting the millions who call Dubai home and the rapidly increasing number of tourists who visit the UAE every year.”

Read: A regional first: A.I. smart taxis to hit UAE roads soon

Poised for expansion

Dubai’s taxi and e-hailing industry is set for expansion, fueled partly by the expected 3 percent compound annual growth rate (CAGR) in the city’s population from 2023 to 2040. A projected 20 percent CAGR in tourism between 2022 and 2025 further boosts this optimistic outlook.

Moreover, with over 425 annual events that Dubai hosts, there is added support for the market’s growth.

In the broader UAE, the taxi market is also headed for continued growth. Estimates show that it could grow to $0.65 million this year. With a CAGR of 3.3 percent from 2023 to 2027, the market volume could hit $0.74 billion by the end of the forecast period.

Additionally, the taxi market could have 3.08 million users by 2027. Meanwhile, the average revenue per user (ARPU) could surpass $206.60. 

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