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Saudi accounted for the lion’s share of proceeds flowing into Gulf IPOs in 1H 2024: Saudi raised USD 2.1 bn in IPO proceeds in the first half of 2024, accounting for 59% of total IPO proceeds in Gulf Cooperation Council countries during the period, investment bank Kuwait Financial Centre (Markaz) said in a recent report (pdf). Saudi IPOs saw proceeds up 141% from the same period last year.
Out of a total of 23 offerings in the Gulf during the first half, 19 were in the Kingdom with three in the UAE, and one in Kuwait.
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Tadawul vs Nomu: Tadawul’s main market saw eight IPOs in 1H 2024 according to Enterprise calculations, raising some USD 1.95 bn in proceeds, while the exchange’s parallel market for smaller, earlier-stage companies Nomu saw 11 IPOs, generating USD 143 mn over the same period, by our math.
The year started strong on the main market and accelerated in 2Q, with multiple IPOs in the market at the same time meeting strong investor appetite. The breakdown:
- Regional broadcaster MBC Group rang the bell on Tadawul in January, offering a strong start to the year.
- Avalon Pharma was quick to follow with a SAR 492 mn main market IPO in February;
- Modern Mills followed suit in March;
- Fakeeh Care went to market in 2Q with the largest IPO of the first half;
- Labor agency Smasco’s heavily oversubscribed offering saw its shares rise 20% in its debut
- Water treatment outfit Miahona saw its shares pop nearly 30% in its debut in early June
- Homegrown fintech Rasan, up the maximum allowed 30% in its debut late last month
- Aluminum products maker Talco, which rose 14% on day one of trading.
Meanwhile, eleven companies offered shares on Nomu, including Pan Gulf Marketing, WSM Information Tech, Al Modawat Specialized Medical, Quara Finance, Al Mohafaza Education, Taqat Mineral Trading, Mohammed Hadi Al Rasheed, Horizon Educational, Leaf Global Environmental Services, Neft Alsharq, and Yaqeen Capital.
The regional view: GCC IPOS raised USD 3.6 bn in 1H 2024, marking a 32% y-o-y decline from USD 5.3 bn in the same period last year. IPO proceeds in the UAE were down 67% y-o-y during the period to USD 1.3 bn through three offerings, while Kuwait raised USD 147 mn from its first IPO since 2022.
Two out of five of the GCC’s top IPOs in Q1 were Saudi: Dr Soliman Abdulkader Fakeeh Hospital raised some USD 764 mn in what was the largest IPO on Tadawul in 1H 2024. Proceeds from the hospital’s IPO accounted for 21% of total GCC IPO proceeds during the period. Modern Mills also raised USD 314 mn in proceeds after taking a 30% stake to the market, with the offering accounting for 9% of total GCC IPO proceeds during the period.
Healthcare IPOs hit the bullseye in the GCC: The healthcare sector accounted for nearly 22% of total IPO proceeds in the GCC with some USD 788 mn in proceeds. This was led by Fakeeh’s IPO. The technology sector accounted for 14% at USD 515 mn followed by the industrials sector with 12% among other sectors.
BACKGROUND- Saudi was IPO king of 2023, dominating issuances in the GCC with 35 of 46 IPOs tracked separately by Kamco Invest (pdf) in January. The figure includes listings on both Tadawul’s main market as well as Nomu. The UAE led the region last year in terms of total IPO proceeds.
As for the pipeline? There’s lots more where that came from:
- Electronics retailer Extra plans to IPO the unit that owns and operates Tasheel, its consumer finance arm, on Tadawul. The transaction is expected to hit the market this fall.
- The Fourth Milling Company (MC4) and Arabian Mills Food Products have been cleared by the CMA for share sales on Tadawul;
- Hotels and resorts operator Boudl has said it intends to go public;
- 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;
- Perfume maker Arabian Oud is said to have appointed bankers ahead of a share sale;
- PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
- Budget airline Flynas is reportedly looking to go public this year;
- Plastics products maker ASG Plastic Factory ia taking a 10.6% stake to Nomu;
- Local contractor Al Ashghal Almoysra is set to debut a 20% stake on the parallel market.
PIF PREPARING NUPCO FOR IPO?
The Public Investment Fund (PIF) has reportedly tapped SNB Capital, JPMorgan Chase, and Morgan Stanley for the planned IPO of its medical procurement firm Nupco, Bloomberg reported yesterday, citing sources it says are familiar with the matter. The offering could take place this year, the sources said. It is expected to raise less than USD 1 bn, Bloomberg reported earlier.
What’s Nupco? Established in 2009, Nupco is one of the Kingdom’s largest medical procurement companies. It supplies supplementary medical and medical devices to the health ministry, university hospitals, and others.
