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Wednesday, October 20, 2021

Qatar transport company Mowasalat eyes possible IPO


Photo for illustrative purposes only.
Photo for illustrative purposes only.

Qatar’s state transport company Mowasalat appears to have reignited plans to float on the Qatar Stock Exchange, according to a recent statement issued by the firm.

The organization, which runs the turquoise Karwa-branded taxis and buses, has been talking about the possibility of going public since at least 2011 when an official then said it would issue an initial public offering (IPO) in 2013.

However, that failed to happen. Then two years ago, the company’s director of strategy, Nasser Al-Khanji, reportedly said the state Cabinet had approved an IPO and that it could be launched in 2015, but again the plans faltered.

Mowasalat CEO Khalid Nasser al-Hail
Mowasalat CEO Khalid Nasser al-Hail

Now, in a statement issued by Mowasalat yesterday to officially launch its new Karwa taxi app, the CEO has again raised the prospect, although he gave no timeline for when this could happen.

“We envisage our company to grow in the future and become a shareholding company with IPO plans,” chief executive Khalid Nasser Al-Hail said in the media statement.

With global oil prices continuing to fall and states in the region looking to cut costs and raise additional capital, experts are anticipating more Gulf-based organizations could be privatized.

Writing in UAE newspaper The National, Mohammed Salih Al Hashemi –executive director for asset management at Abu Dhabi Investment Co. – said most speculation surrounded state-run entities in Saudi Arabia, Oman and Bahrain.

Expectations of privatizations in Qatar have been “unsurprisingly muted”, because of the state’s domestic and international financial reserves.

Authorities in Qatar have been trying to encourage more companies to publicly sell shares. Some organizations including Qatar Airways and Al Jazeera have previously mooted the idea but failed to follow through.

Public listing

According to Qatar Stock Exchange there are currently 43 companies publicly listed on the country’s main bourse.

Mesaieed Petrochemical Holding Co., a Qatar Petroleum subsidiary, is the most recent to join after it announced in December 2013 that it would launch initial public offerings of its shares to Qatari citizens.

This was the first IPO that Qatar’s stock market has seen since 2010, when Mazaya Qatar Real Estate Development Co. joined the exchange, Reuters said.qatar exchange

Benefits of companies going public include the chance to raise capital through a wider group of investors and the introduction of employee incentive schemes, Qatar Exchange advises in a list of pros and cons for publicly listing.

However, the process of launching an IPO can be time-consuming and expensive, and once public companies are open to greater public scrutiny.

In announcing its intentions to go public, Mesaieed Petrochemical billed the move as a way of transferring wealth from the state to citizens as well as developing a “culture” of investment and savings among Qatari nationals.

More taxis

In addition to the prospective IPO, Mowasalat also said it is planning to increase the number of franchise companies which operate 4,000 Karwa taxis on Qatar’s streets.

An addition 3,000 cars will join the fleets by 2022, in time for what is expected to be nearly a million football fans, officials and players arriving in Doha for the football World Cup.

One of the new Toyota Innova airport cabs operated by Cars Taxi.
One of the new Toyota Innova airport cabs operated by Cars Taxi.

There are currently four private firms operating taxis under the Karwa brand: Al Ijarah (with blue roofs), Al Million (maroon), Capital (dark grey) and Cars Taxi (yellow), in addition to the light-grey Mowasalat-run cabs.

In the Mowasalat statement, Al-Hail said that “more franchise operators (will be) joining,” although declined to give further details.

In addition to the new firms, existing taxi operators will likely be given licenses to increase their fleets as part of the overall expansion, a Mowasalat spokesperson told Doha News.

The transport company has previously said that its longer-term strategy includes plans to entirely privatize the Karwa fleet by 2017 as more franchise firms will be brought on board while Mowasalat withdraws to operate solely as regulator.

New app

In a bid to compete with the increasingly popular private taxi firms Uber and Careem, Mowsalat yesterday officially launched its Karwa Taxi app, which has been in pilot phase since November last year.

Karwa taxi app
Karwa taxi app

Available on iOS and Android, the company said the new technology has cut customer waiting times for a taxi from six hours at peak time to now around 15 minutes.

“Efforts are on to reduce the waiting time further to 10 minutes,” Abhijit Mukherji, head of Mowasalat’s limo and taxi services said, Gulf Times reports.

Customers can use the app to see which taxis are in their location, and the approximate arrival times. Bookings through the new central call center, which operates for all the franchise firms, has helped improve efficiency, Mowasalat said.


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