Damas Plans Initial Public Offering to Finance Expansion

The Damas Group is to become the first family-owned diamond jewelry business in Dubai to raise $300 million through an initial public offering (IPO) to finance new stores and a jewelry manufacturing facility.

The money raised in the proposed flotation will be used to expand the company's retail presence in its main markets abroad, as well as helping in the construction of a manufacturing plant to be built at the Dubai Metals and Commodities Centre (DMCC), according to the Khaleej Times.

The total size of the new company following flotation will be two billion dirhams ($545 million), including 900 million dirhams ($245 million) of existing capital and 1.1 billion dirhams ($299.5 million) of new share subscription.

“Our intention… is not to raise funds per se, but to convert a family-owned business into a corporate entity that will ensure business continuity for years and decades to come,” the paper cited Tawhid Abdullah, Managing Director of Damas.

“We feel that a conversion into a corporate entity with a wider shareholder base puts us in a better position to compete in an increasingly competitive environment in future,” he said.

Up to 30 percent of the equity proceeds would go towards expansion in the rest of the Gulf, the Middle East and India, which have been identified by Damas as its main foreign markets. “We are also planning to create one of the most sophisticated manufacturing facilities at the DMCC which will eventually provide 20 percent of Damas' jewelry volumes.”

The application is awaiting Ministry of Finance and Industry approval, which is expected to take two to three months, according to Abdullah. The company is aiming to launch the IPO later this year.