By Irfan Nagi, Chief Financial Officer, TFC
On the eve of June 8, 2021, we received approval from Capital Market Authority, KSA for floating Tanmiah Food Company 30% shares at the Tadawul which means out of the total 20 million shares, 6 million shares were offered to the public. This approval marks a very important achievement for Dabbagh Group, firstly as Tanmiah is the first fully dependent poultry business to be approved by the CMA and secondly this approval very clearly exhibits the groups governance and professionalism in conducting its business affairs paving way for future listings of its businesses.
We had more to celebrate shortly after this approval, by completing the quickest institutional book-building turnaround within 20 days. The resultant book building was a whopping success whereby the IPO was oversubscribed by 95 times, the largest percentage in recent Tadawul history. This was followed by a successful retail subscription and listing on Tadawul and it beagn trading under the symbol 2281 on August 4, 2021 under the consumer staples sector.
The IPO priced at SAR 67; the top end of the range previously set at SAR 59-67. In accordance with the IPO Prospectus, six hundred thousand (600,000) Ordinary Shares were allocated to individual investors, representing 10% of the total shares offered for public subscription, while five million four hundred thousand (5,400,000) Ordinary Shares were allocated to institutional investors, representing 90% of the total offered shares. Proceeds of SAR 402 million were raised by the offering.
Tanmiah embarked on this journey in September 2018 and went through a transformation of being a family owned business to a publicly listed company during this 2.5 year period. The key drivers for Tanmiah equity story stems from KSA 2030 vision targeting 100% self- sufficiency in local poultry production.
Tanmiah’s IPO journey was marked to date with various milestones along the way. From business realignments to legal structure optimisation, strengthening our operating controls in addition of revalidation of risk management tactics, aligning Tanmiah’s governance in line with CMA and achieving high marks in our IPO readiness. These changes allowed us
1. To think and act more like a public company in our day to day affairs,
2. To make our employees more aware of and compliant with their responsibilities
3. To complete organizational changes, ensuring compliance with increased governance requirements.
4. To Inculcate a new culture of responsibility and empowerment
5. To automate the financial and operational MIS to improve reporting timelines and faster turnaround
6. To become more sustainable
Tanmiah reaped the advantage of these changes especially during the pandemic as we were ready with a business resilience plan well in advance as part of the IPO preparedness, which proved to be a perfect armour against the COVID 19 pandemic which hit the whole world and as a result Tanmiah was able to go through this difficult time with enhanced margins.
All of the above was achieved by a relentless and resilient IPO team lead by CFO, this consisted of staff from finance and were well supported by members from the other department as well. This entire achievement is a result of their dedication, hard work, and self-motivation.
Tanmiah benefits in many ways by becoming a listed company and immediate advantage is by committing to high standards of governance, we become a more competitive business with a more diverse range of partners and voices onboard. The listing will improve the strength and quality of our brand and help it increase the already high trust that it enjoys. This will make it a more attractive prospect for lenders, investors, and employees. Our profile as a listed company will enable us to reduce our future cost of capital by facilitating easier access to both equity and debt financing, to the benefit of current and future shareholders.