Delivery Hero Shares Fall After Talabat IPO

Investing.com — Shares of Delivery Hero fell over 10% on Tuesday as its unit, Talabat, debuted on the Dubai Financial Market, raising $2 billion in its initial public offering.

Despite breaking records in the tech sector and the GCC region this year, Talabat’s first trading day was volatile, impacting its parent company’s valuation.

Talabat’s shares opened at Dhs1.70, higher than the IPO price of Dhs1.60, set at the upper end of the marketed range. However, initial gains quickly faded, with the stock dropping by as much as 7.5% and closing 12.4% lower at Dhs1.5.

This decline was surprising considering Delivery Hero's successful offloading of 4.7 billion shares last month, which had raised investor expectations for Talabat's listing.

The IPO initially sought to raise Dhs 5.6 billion by offering a 15% stake in Talabat, but strong demand led Delivery Hero to increase the offering to 20%.

Investor enthusiasm was bolstered by cornerstone commitments from prominent investors, including the UAE Strategic Investment Fund and Abu Dhabi Pension Fund, who collectively subscribed to Dhs918 million worth of shares.

Despite this demand during the IPO, Talabat’s lackluster debut pressured Delivery Hero's shares, signaling market uncertainty around the company’s near-term growth prospects.

Talabat's IPO valued the company at approximately Dhs37 billion, but the first-day market reaction reflected investor caution amid global economic pressures, highlighting the challenges of maintaining momentum in a competitive industry.