Rasan sets price range for Tadawul IPO

Fintech startup Rasan has set a price range of SAR 35-37 per share for its IPO on Tadawul’s main market, according to a statement (pdf). It is selling a 30% stake through an offering of existing and new shares. That range means Rasan could raise as much as SAR 841 mn from the IPO, and values the company at up to SAR 2.8 bn, according to our calculations.

Subscription to the IPO kicked off yesterday for institutional investors and will run until this Thursday, 16 May. Retail investors will have two days to place their orders starting Thursday, 29 May. The share sale sees Rasan offering 22.7 mn shares, including 17.4 mn shares from 15 selling shareholders and 5.3 mn news shares.

What’s next? The final allocation of shares will take place on Tuesday, 4 June, with any excess subscription fees set to be refunded by Thursday, 6 June. The first day of trading remains contingent on meeting fulfilling relevant regulatory requirements.

Use of proceeds: Rasan plans to use the proceeds to “expand the group’s current operations and products, market and develop the group’s new products, and finance the general purposes of the group,” it had said in its intention to float (pdf). A portion of the net proceeds — after deducting SAR 40.4 mn to cover IPO-related expenses — will be distributed to the selling shareholders on a pro rata basis.

REMEMBER- Rasan is a first mover in an industry with plenty of room to grow thanks to both the under-penetration of the industry and ins. industry targets in Vision 2030. Per the ITF: “Ins. penetration in the Kingdom, defined as gross written premiums as % of GDP, stood at 1.3% in 2022, considerably lower relative to regional markets (UAE: 2.5%, Bahrain: 1.7%) and even lower compared to the global average of 6.6%.”

ADVISORS- Saudi Fransi Capital is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter. Morgan Stanley Saudi Arabia is also acting as financial advisor, bookrunner, and underwriter. Receiving banks include Banque Saudi Fransi and AlRajhi Bank. Latham & Watkins is Rasan’s legal advisor, while White & Case was appointed as legal advisor to the lead manager, financial advisors, underwriters, and bookrunners. PwC is financial due diligence advisor and marketing consultant and EY is serving as auditor.

SAUDI IPO PIPELINE AT A GLANCE-

Among the transactions now in the market or expected soon:

• Labor agency Saudi Manpower Company (Smasco) is selling a 30% stake;
• Water treatment outfit Miahona has priced its IPO at the top of the range after recording strong investor appetite;
• Dr Soliman Abdul Kader Fakeeh Hospital looks set to become the largest IPO so far this year;

• Budget airline Flynas is reportedly looking to go public this year;

• PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
• Hotels and resorts operator Boudl has filed to go public;

• Fourth Milling Company will list before the end of June;
• Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
• Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX;
• Aster DM Healthcare looks set to spin-off its GCC assets and seek a dual listing on Tadawul and in the UAE.