The Qatar-based construction firm Aljaber Group is planning an initial public offering (IPO) worth approximately $800 million on the Doha stock market, according to a Reuters report.
IPOs have been rare on the Qatari market, which has seen only Mesaieed Petrochemicals go public in the last six years. Market volatility and a slow regulatory approval process in the country are reportedly behind this, but Reuters said Qatari banks have indicated that the authorities are showing more willingness to consider clearing new listings of late.
Several IPOs are being worked on, the report added, as well as listings from companies who will be floating their shares on the market without raising new capital, as Qatar First Bank did in May.
Founded in 1976 as a retailer of paints and building supplies, the Aljaber Group has since expanded to be one of the country’s largest construction firms. The report said it remains unclear when exactly the company will go in for the listing as that depends on the market regulator giving a green light. It was also unclear how much of the company Aljaber planned to offer investors.
The recent downturn in Qatar’s construction sector brought on by lower oil prices may be a factor influencing the regulator’s thinking, Reuters said, citing an Abu Dhabi Commercial Bank statistic which found the number of projects being awarded in the country to be down nearly 90% year on year.
Quoting a Doha-based source, the report added that the market regulator may feel floating a real estate-linked business in the prevalent economic scenario could be unwise, with investors considering the investment too risky, leading to the issuer having to sell shares cheaply to get the offering away.
The report, however, found another Gulf-based banker to be of the opinion that the Aljaber Group was in a strong position to list because it had a long pipeline of government infrastructure projects and was doing much better than rivals. Among the projects Aljaber is working on are the gold line of the Doha Metro and several road projects.
