The subscription period for the IPO will close on Monday.
United Securities in an IPO report recommended investors to subscribe to the IPO as the issue is priced at a reasonable discount to its 12 month target price of 137bz per share. The report further highlighted that MCDC has stable and predictable cash flows, resilient to potential shocks in electricity prices and water demand during the term of the water purchase agreement.
Gulf Bader Capital Markets (GBCM) also ascribed a ‘subscribe’ outlook for the IPO with a 12 month fair value price of 135bz per share. GBCM report stated that the strategic location of MCDC plant along with strong shareholders support strengthen their investment case.
GBCM also recognised the dividend yield of approximately eight per cent and advised ‘to hold the stock post listing for institutional investors looking at the medium‐term perspective, and a revival in retail investors participation in this issue aiming for listing gains’.
Al Maha Financial Services’ research indicated a fair value of 156bz per share and the upside potential of 35 per cent on the IPO price of 116bz. Al Maha Financial Services’ report said, ‘We recommend investors to subscribe to the issue, in view of the stable and defensive business model of the company, consistent profitability, attractive dividend yield as well as the capital appreciation potential of the stock on listing and going forward.’
Ubhar Capital’s report on the IPO stated, ‘We recommend to subscribe for the IPO of MCDC. The fair value of the company comes out to be 135bz per share, implying potential upside of 16.4 per cent on the offer price.’
Horizons Capital Markets’ report said that as a dividend play stock MCDC is suitable for all investors.
MCDC is offering 54,442,640 shares, representing an offer of 35 per cent of the share capital of the company.