Privately owned businesses will now be able directly list shares on the Abu Dhabi Securities Exchange (ADX)’s Growth Market, without the need for an initial public offering (IPO), presenting a path for companies to begin their capital markets journey.
To be eligible for inclusion in the Growth Market, companies must convert to a private joint company, have at least two years of incorporation and records of audited financial statements, and list at least 5 percent of their share capital.
The exchange also offers companies post-listing assistance, including access to AGM management, dividend distribution, and corporate communication support.
Privately owned companies can also benefit from a wide investor base, with key support from the ADX on investor engagement, and an opportunity to enhance their brand equity through the Growth Market, which is the Abu Dhabi Securities Exchange (ADX) rebranded Second Market.
The Growth Market, which replaces the Second Market established in 2014, is a key equity market on the exchange that connects investors and privately owned businesses.
The move complements Abu Dhabi’s fast-developing ecosystem for companies that are looking to catalyse their growth.
The chairman of ADX, Hisham Khalid Malak, said: “The Growth Market is an integral part of the ecosystem that Abu Dhabi is building to nurture business, from start-ups through to maturity. Abu Dhabi provides one of the most business-friendly environments in the world, which has been enhanced by an accommodating legal framework and government initiatives to promote opportunities for the private sector.
“The Growth Market will provide confidence to owners of companies and investors that there is a clear and straight-forward pathway for companies to begin their capital markets journey in Abu Dhabi.”
The Growth Market is open to businesses from any industry, including sectors as diverse as sports, transportation, wholesale trading and healthcare.
Equally, both the listing and disclosure requirements have been specifically tailored to this group of companies while ensuring that governance and the process is both robust and streamlined in nature.
The managing director and chief executive officer of ADX, Saeed Hamad Al Dhaheri, said: “As we continue to execute on our ADX One strategy we endeavour to both revaluate our existing offering and introduce new products and services which enhance connectivity between investors and companies looking for differentiated opportunities for growth.
“The Growth Market encapsulates our continued ability to meet both issuer and investor needs while also adding scale to our offering and growing exchange. By paving the way for companies to begin their capital markets journey, in a streamlined and less onerous manner, we open up numerous growth avenues for them to explore including facilitating a potential IPO on the Main Market in the future.”
With a market capitalisation of $16.88 billion (AED 62 billion), the Growth Market delivered robust performance in 2021, allowing companies to enhance their market share and fuel their growth.
The value of shares traded on the Growth Market in 2021 exceeded $4.35 billion (AED 16 billion), while the total number of companies listed on the market increased to 13.
This growing and strong ecosystem is designed to help them fuel their growth while gaining invaluable experience of having their shares being publicly traded along with the wider associated benefits such as access to capital and funding, enhanced governance, and increased liquidity for shareholders.
The rebranding follows the unveiling of a new brand and logo for the exchange last year. The exchange celebrated the launch of the Growth Market with a bell ringing ceremony held at its headquarters.
The relaunch of the Growth Market is part of the ‘ADX One’ strategy to enhance liquidity and increase the exchange’s market capitalization over the next three years.
Announced at the beginning of 2021, the ‘ADX One’ strategy comprises 22 strategic projects to encourage the listings pipeline, enhance corporate governance and introduce new products and services that meet the requirements of issuers and global investors.
The market capitalisation of the Abu Dhabi Securities Market General Index has more than doubled since 2021 to more than $490 billion (AED 1.8 trillion), supported by a series of listings and increased international investment.
Meanwhile, the benchmark Abu Dhabi General Index (ADI) gained 64 percent in 2021, making it one of the best performing equity indices in the world.
Source:https://www.arabianbusiness.com/money/corporate/capital-markets/private-sector-companies-can-list-shares-on-adxs-growth-market-without-the-need-for-an-ipo