QLM Medical and Life Insurance Company, which has built a substantial brand value in Qatar and in the wider Gulf Co-operation Council region, is expecting a very "positive" response to its initial public offering (IPO), whose subscription begins on Thursday.
Sheikh Saud bin Khalid al-Thani, chairman of QLM, on Tuesday sounded optimistic regarding this at a press meet to outline the finer details of the IPO through which it is eyeing to raise QR659.4mn by offering 210mn ordinary shares in two tranches.
The IPO will close for subscription on December 23.
Explaining the rationale behind tapping the market, he said it is due to the fact that the company has reached an operational maturity and has an "excellent" financial condition, enjoying strong profitability and high dividend paying capacity.
"The offering comes as part of our responsibility to support the Qatari national economy and to achieve the Qatar National Vision, 2030," he said. The move should be seen as the first step and the main pillar in executing the company's strategic goals to become the leading and largest national insurance company in medical and life insurance in the region, he added.
QIC Group chief executive Salem Khalaf al-Mannai said QLM has priced the offer shares at a premium to its book value as it enjoyed continuous profits since its establishment over nine years ago; as a result it accumulated "sizeable" undistributed profits, reserves and surpluses on its balance sheet over and above its share capital.
"QLM’s major shareholder, QIC, has been evaluating the option to IPO QLM and believes now is the appropriate time for QLM from an operational and commercial standpoint," he said, adding global and local market sentiments have improved, with the Qatar Stock Exchange's index currently trading at a positive year-to-date performance.
The IPO is being offered at QR3.15, which includes a premium of QR2.14 and listing fees of QR0.01, corresponding to a total market capitalisation of QR1.1bn.
As per the IPO prospectus, in the first tranche, as much as 45%, or 157.5mn, shares are offered to individuals and corporates and in the second tranche, the remaining 15%, or 52.5mn, shares are offered to anchor investors such as the General Retirement and Social Insurance Authority, Mwani Qatar and Doha Insurance Group.
After the maiden offer, Qatar Insurance Group will retain 25% stake and the other 15% will be retained by other pre-IPO investors, or founders.
QLM, which is the largest provider of group medical insurance in Qatar based on the number of members and gross written premiums (GWP), is expected to be listed on the QSE by January 6, 2021.
QLM, whose solvency ratios have consistently been above the statutory requirements, has diverse portfolio of clients with no single customer representing more than 8% of the GWP.
