Salik, Dubai’s road toll operator, has become a well-known entity among UAE residents, with many utilizing its services daily. In September 2022, Salik launched its Initial Public Offering (IPO), offering a unique investment opportunity for both retail and institutional investors. This report will guide you through the process of investing in Salik, evaluate whether it is a good investment, and highlight the best strategies for maximizing your investment.
How to Invest in Salik
Investing in Salik shares is a straightforward process. Here’s a step-by-step guide:
- Eligibility: Ensure you have a National Investor Number (NIN). If you don’t have one, you can register through the Dubai Financial Market (DFM) website.
- Choose Your Bank: You can subscribe to Salik’s IPO through 11 banks, including Emirates NBD, Abu Dhabi Commercial Bank, and Dubai Islamic Bank.
- Subscription Process:
- For Account Holders: Log into your bank’s online banking platform or mobile app. Select the IPO subscription link, enter your NIN, specify the subscription amount, and submit your application.
- For Non-Account Holders: Visit the bank’s website, follow the instructions to create an account, and complete the subscription form.
- Minimum Investment: The minimum subscription amount for individual investors is set at Dh5,000, while institutional investors must subscribe for a minimum of Dh1 million.
- Notification: After the subscription period ends, you will receive an SMS notification regarding the allocation of your shares.
Financial Performance and Potential
Salik has demonstrated a robust financial profile, making it an attractive investment option:
- Revenue: Salik reported revenues of Dh1.69 billion in 2021 and Dh944.9 million in the first half of 2022.
- Government Backing: The Dubai government retains an 80% stake in Salik, providing a level of security for investors as the government’s interest aligns with the company’s profitability.
- Dividend Policy: Salik aims to distribute 100% of its net profit as dividends after retaining necessary reserves. The first dividend is expected by April 2023.
Is Investing in Salik a Good Idea?
Investing in Salik appears to be a promising opportunity for several reasons:
- Stable Revenue Stream: As a toll operator, Salik benefits from consistent revenue generated by road usage, making it less vulnerable to economic fluctuations.
- Growth Potential: With plans to expand its toll gate network, Salik is positioned for future growth, which could enhance its profitability.
- Market Sentiment: The IPO is expected to be oversubscribed, indicating strong investor interest and confidence in the company’s future.
Best Investment Strategies
To maximize your investment in Salik, consider the following strategies:
- Long-Term Holding: Given the expected stability and growth of Salik, a long-term investment strategy may yield significant returns, especially with the anticipated dividends.
- Diversification: While investing in Salik, consider diversifying your portfolio with other stocks or assets to mitigate risk.
- Stay Informed: Keep abreast of Salik’s performance and any changes in the tolling system or government policies that could impact revenue.
Overall
Investing in Salik presents a unique opportunity for both individual and institutional investors. With a solid financial foundation, government backing, and a clear growth strategy, Salik is likely to be a profitable investment. By following the outlined steps for investment and employing effective strategies, investors can position themselves to benefit from this promising IPO. Always conduct your own research and consider consulting a financial advisor before making investment decisions.