Department of Economic Development
Dubai SME, the agency of the Department of Economic Development mandated to develop the small and medium enterprise (SME) sector, together with the Dubai Financial Market (DFM) and NASDAQ Dubai, organized a seminar for Dubai SME100 companies on the various options for raising capital, including taking the initial public offering (IPO) route.
The aim of the ‘Financing for Growth’ seminar, addressed by a panel of capital markets experts, was to raise awareness and inform the CEOs and senior executives who attended of various financing options, including debt and private equity as well as listing on an exchange.
Accessing financial capital remains a major challenge for many small and medium enterprises (SMEs), including successful and well-managed companies. Achieving it in the right way is an important strategic decision as it underpins the growth potential of the company, whatever its stage of development.
SMEs ready to embrace capital from various sources, including raising funds through the equity markets, can benefit from streamlining their procedures and structures, including institutionalizing financial governance, corporate transparency, appointing independent directors and developing investor relations.
Dubai SME introduced the Dubai SME100 ranking initiative to support dynamic and ambitious SMEs to open their minds to new growth channels that will allow them to become bigger and better as well as more professional, productive, global and visible. The joint seminar was part of the post-ranking journey Dubai SME has put in place to help CEOs of SME100 companies advance their company’s capabilities and professionalism.
Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, remarked: “I am delighted to partner the esteemed DFM and NASDAQ Dubai to push the frontiers further on access to SME financing through this workshop. The listing preparation processes of DFM and Nasdaq Dubai are SME-friendly, thus promising to make it smoother and less onerous for SMEs to list.”
Al Janahi added: “I hope Dubai SME100 companies and other ambitious SMEs will take the opportunity to learn more about the IPO route and prepare themselves should they decide to list one day. Dubai SME believes that a number of SME’s here are capable of exercising the IPO option in the next couple of years.”
The panel of experts speaking at the seminar comprised Azhar Zafar, CEO, Ernst & Young Corporate Finance; Andrew Tarbuck, partner at the international law firm Latham & Watkins LLP; Karim Schoeib, Managing Director and Head of Investment Banking at SHUAA Capital PSC, and Saqib Rashid, Principal of private equity firm Riyada Enterprise Development, a member of the Abraaj Group.
Fahima Al Bastaki, Senior Vice President, Head of Business Development, Dubai Financial Market (DFM) said: “As the main driver of any economy, the SME sector on average contributes 75% of the economic activities, and this percentage edges up to 90% in some countries. Therefore, the UAE in general and the Emirate of Dubai in particular extensively support this sector through many organisations including Dubai SME, the leading example in this regard.
“Through such events, DFM and NASDAQ Dubai join hands with Dubai SME to educate SME’s on funding options and endeavour to prepare these companies to go public. Undoubtedly, our national economy is privileged with a wealth of SMEs qualified for this significant step. Going public and listing is imperative for companies looking for finance through capital markets and for investors who are looking to invest in fast growing economic sectors.” She added.
Craig Hewett, Head of Business Development at NASDAQ Dubai, said: “As the region’s international exchange, NASDAQ Dubai enables issuers to sell shares at their market value through a book build IPO. Owners need to sell no more than 25% of the company, enabling them to retain control after listing. These advantages, together with access to international as well as regional investors, are designed to give SMEs and family-owned businesses the fresh capital they need to prepare for the next stage of their journey.”
More than 50 representatives from over 40 SME100 companies attended the seminar. A case study from one of the SME100 companies was also presented to help fellow SMEs understand the challenges and opportunities of raising risk capital for growth. Drake & Scull, which listed on DFM in 2009, spoke about the company’s experience in preparing for its IPO and life as a company after listing.
DFM and Nasdaq Dubai have also decided to work closely with Dubai SME to assist and guide selected SMEs on their IPO journey.