Maldives Islamic Bank launches IPO

The Maldives Islamic Bank has launched its Initial Public Offering on the Maldives Stock Exchange with the aim of raising MVR244 million (US$15.8 million), offering a 31 percent stake for public ownership.

The IPO opened for subscription on Sunday with a closing date of September 18.

The MIB, the country’s first Sharia-compliant bank, is offering 6,975,000 shares at a price of MVR35 per share, including 4.5 million ordinary shares offered for subscription and 2.4 million offered for sale by the founding shareholder.

According to the bank, buyers must subscribe to a minimum of 20 shares, which is equivalent to MVR700. Subscriptions exceeding the minimum amount must be in multiples of 10 shares.

The expected date of listing of the shares or commencement of trading is November 12.

MIB would become the ninth company to listed on the Maldives Stock Exchange.

Islamic finance has grown in the Maldives since the MIB opened in March 2011 to cater to unmet demand from the 100 percent Muslim population. It was founded with a 15 percent stake owned by the government and 85 percent by the Islamic Corporation for the Development of the Private Sector. In 2017, the government acquired a further 10 percent of the bank’s ownership.

Under Islamic Shariah, any risk-free or guaranteed rate of return on a loan or investment is considered riba (usury or interest), which is prohibited in Islam.