Qatar's Al Rayyan Bank Initial Public Offering (IPO) closed on Sunday 29th January more than 6 times over-subscribed having raised in excess of QR 14.2 billion (US$3.9 billion) in subscriptions. More than 780,000 applications were received from all GCC countries including Qatar and those issued via the internet.
The Qatari Share of the applications totalled more than 7 times the capital specified for them in the IPO which is equivalent to more than 330 million shares. 50% of the QR10 nominal value will be paid, in addition to (35) Dirham subscription fee. This equates to QR 1.765 billion. The total number of applications from Qataris reached 202,793.
Al Rayan Bank had floated 412,500,000 of its shares for the Initial Public Offering at a nominal value of QR10 per share; the capital of Al Rayan Bank being QR7.5 billion distributed through 750 million shares.
Dr. Hussain Ali Al-Abdulla, Chairman of the Al Rayan Bank Founding Committee said: “The refund operation of excess monies will start 2 weeks after the closure of the IPO for Qataris and after 3 weeks for GCC subscribers, by either crediting their accounts or sending them to the FBO (First Beneficiary Order).”
Qatar National Bank (QNB) played a dual role as both the IPO and Subscription Manager for Al Rayan Bank. In addition, QNB was the only bank to accept subscriptions from GCC nationals.
The over-subscription figures indicate that this offering is now the largest ever pan-GCC IPO both in terms of the number of applicants and the capital sought. Furthermore, QNB is now the 1st bank in the region to run a successful pan-GCC IPO without help from an external consultant or a foreign banking partner.
Saudi nationals contributed the highest number of investors subscribing for the shares, representing 51% of the non-Qatar GCC total. Bahrainis followed with 14% and Kuwaitis at 13%. The graph in Figure One illustrates a breakdown of the subscription base from all GCC countries.
Over the 15-day subscription period, a daily average of 38,500 GCC applications were submitted at QNB’s special facility. However, as witnessed by the crowds descending upon the Qatar Sports Club, some days were busier than others. The highest number of applications from other GCC countries was on Thursday 27th January when 82,000 were received and processed by QNB staff. The chart in Figure Two shows how the number of applications processed grew over the offer period.
Mr Ali Shareef Al-Emadi, Acting Chief Executive of QNB remarked that: “The overwhelming level of interest in the Al Rayan Bank IPO certainly attests to investors’ confidence in the bank and in the vision of its founding members. When it starts to operate, I expect Al Rayan Bank to be the Islamic bank with the strongest capital base in the GCC. Investors have also taken heart from the strong performance of other banks in the Gulf countries whether commercial or Islamic or a mixture of both.”
As the IPO and Subscription Manager of this high profile offer, QNB knew it had to spare no effort to ensure that all aspects of the offer were thoroughly considered beforehand. This helped ensure a smooth and fair process for all applicants. The preparations included:
- The printing of a total of 1.5 million application forms
- The recruitment, deployment and training of 550 staff directly employed by QNB to answer queries, check applications, accept multiple applications and to register accurately thousands of applications and cheques.
- The purchase and installation of special equipment including 350 computer terminals at the Qatar Sports Club all of which will be recycled by QNB after use.
It is worth mentioning that Al Rayan Bank was the 10th IPO handled by QNB since the inception of the Doha Securities Market.”
Mr Al-Emadi continued: “For such a large-scale IPO such as Al Rayan Bank, we wouldn’t have succeeded alone. This offering clearly shows the value of strong partnerships and collaboration. The Ministry of Interior were especially co-operative, for which I am very grateful. Other banks in Qatar also made a significant contribution to the success of the IPO especially for Qatari nationals. And I must also thank the Qatar Sports Club management for allowing us to use their facility at short notice. My appreciation is also extended to the Ministry of Finance and the Doha Securities Market for allowing this IPO to proceed. The logistics for the Al Rayan IPO were challenging, to say the least. Our planning had to be meticulous to ensure we were fully prepared for the strong level of interest anticipated from the day the IPO opened on 15th January. For example, female investors were provided specific areas and trained QNB personnel to help in processing their applications.”
Mr. Al-Emadi concluded: “We were happy to receive the anticipated thousands of visitors. As the crowd of applicants swelled, representatives from the Ministry of Interior, Group 4 Security and even the catering & cleaning company acted in concert with us to ensure that the application environment remained smooth and orderly.”
© 2006 Al Bawaba (www.albawaba.com)
