Frequently Asked Questions
What are the benefits of listing on Nasdaq Dubai?
There are significant advantages to be gained from a Nasdaq Dubai listing. These include:
- You can maintain control of your company by normally selling as little as 25% of its shares when you list, or more if you prefer.
- You can raise the market value of your company’s shares by opting for a bookbuild valuation process.
- You can leverage global and regional branding with the brand Nasdaq to support your international status.
- You are exposed to a large investor base as you will be linked to nearly all the largest UAE brokers and largest global investment banks.
Liquidity is supported through Nasdaq Dubai’s use of DFM’s trading platform, on which a combined total of more than 70 companies can be traded. Nasdaq Dubai allows its listed companies to appoint brokers as market makers, which facilitate liquidity by maintaining both buy and sell orders simultaneously. A Nasdaq Dubai listing also benefits from the international standards applied by the DFSA, the exchange’s regulator in the DIFC.
Which key advisers are involved in the IPO process?
Four key advisers are typically involved in the IPO process with different but interdependent roles. The legal adviser is responsible for all legal requirements of the IPO process. The investment bank is the guide of the overall IPO process and makes sure the company complies with listing and admission rules. The public relations agency positions the company in terms of perception and arranges media events. The financial adviser counsels the company on financial statements and accounting requirements.
How long does the IPO process take?
If all documents are handed in and approved on time, an IPO can be completed within 20-30 weeks. However much groundwork is often necessary before that stage. The overall IPO process from the time a company starts to think about going public can take as much as two years depending on how well prepared the company is.
Which criteria do companies have to meet to list on Nasdaq Dubai?
Companies must meet the following criteria:
- Minimum market capitalisation of USD10 million.
- Normally listing at least 25% of shares (free float requirement).
- Three years of audited financial statements.
- To ensure a reliable price formation process, companies must either have a sufficient minimum number of bona fide shareholders, each holding securities with a value of at least USD2,000, or appoint a market maker, which continuously provides bid and offer orders in a stock.
What are the steps involved in the IPO process?
A series of steps must be taken to prepare your company for an IPO, ranging from due diligence on its business and background and the development of its equity story, to the documentation process, the marketing of the shares and the listing itself.
Which documents does Nasdaq Dubai require?
The checklist on this page provides an overview of documents required to be given to the DFSA for listing and to Nasdaq Dubai for admission to trading.
How do I start to apply for a listing?
Nasdaq Dubai welcomes discussions with companies at an early stage in their plans to carry out an IPO. Companies can also benefit from early discussions with the DFSA, the listing authority for the exchange. In due course, the prospectus must be submitted to the DFSA and an application made to it for admission to its Official List of Securities. An application must be made to Nasdaq Dubai for admission to trading.
What does a prospectus include and how do I tackle this?
A prospectus is a document that explains the terms of a share offering before an IPO and gives information about the company that will issue the shares, such as a description of its business, financial statements and biographies of officers and directors. A company’s investment bank adviser (also called bookrunner or underwriter) is responsible of preparing the company’s prospectus.
What are the foreign ownership rules regarding an IPO on Nasdaq Dubai?
The exchange imposes no foreign ownership restrictions. Companies based outside a free zone in the UAE may however be subject to foreign ownership limits under UAE law, whereby no more than 49% of a company may be owned by foreign nationals.
What should be considered after an IPO?
Continuous communication is the key to keeping investors interested in your company and informed about its activities and developments.
What fees does Nasdaq Dubai charge?
The exchange’s fee structure is competitive and tailored to the needs of the market. Refer to the Listing and Annual Fees page for details.