Egypt's Domty Bets IPO Discount Will Draw in Investors

Arabian Food Industries Co. is courting investors in the Gulf and Europe for Egypt’s first initial public offering in eight months, betting on discounted shares to outweigh a foreign currency shortage that has curbed appetite for the nation’s assets.

The family-owned maker of juices and cheeses known as Domty is visiting the United Kingdom, United Arab Emirates and potentially the U.S. and South Africa to drum up interest for the sale of as much as a 49 percent stake. The indicative price range per share is between 8.8 and 9.2 Egyptian pounds, the company said in an e-mailed statement Wednesday, which values the company at about 2.3 billion Egyptian pounds ($294 million).

The Giza, Egypt-based dairy producer is the first company to seek an IPO since Emaar Misr for Development SAE, whose shares fell more in the first week of trading in July than in any Egyptian debut stock since 2008. The property developer subsequently bought back some of the newly issued equity. Domty’s offering will test investor sentiment as the government considers selling shares in as many as four state-owned companies on the Cairo Stock Exchange this year to boost the bourse’s profile after the benchmark EGX 30 Index fell 36 percent in the past 12 months.

"It isn’t rocket science to tell anyone that the company is exposed to a high growth industry," said Allen Sandeep, Cairo-based director of research at Naeem Brokerage. “The size is not that large to draw in huge amounts of money but at the same time this could be the beginning of people taking new positions depending on the pricing."