Saudi Arabia’s Tadawul looks to raise AED3.67b from its IPO

Bloomberg

Saudi Tadawul Group Holding is seeking to raise as much as AED3.67 billion ($1 billion) after setting the price range for an initial public offering (IPO) at 95 riyals ($25.32) to 105 riyals per share, the company said on Sunday. The Riyadh-based bourse, on which oil giant Saudi Aramco trades, plans to sell a 30% stake, or 36 million shares.
The offering comes amid an IPO boom, with companies around the world raising a record of more than $600 billion this year.
“This will surely keep investors on Tadawul excited,” said Junaid Farooq, a fund manager at Frontier Investment Management Partners Ltd in Dubai. “Government policy is highly supportive of private businesses listing on the exchange and there are over 60 planned IPOs in the pipeline over the next three years.”
Tadawul’s IPO has been on the cards since at least 2016, when it hired HSBC Holdings Plc as an adviser. It put the offering on hold while the exchange went through a process of increasing access for foreign investors, and then staged the listing of Aramco in 2019, the largest ever.
The process was resumed earlier this year and Tadawul replaced HSBC with Citigroup Inc, JPMorgan Chase & Co, and SNB Capital as financial advisers and global coordinators. It’s set to be the biggest offering in the exchanges sector since Euronext’s $1.2 billion initial
public offering in 2014.
An average of 254 million shares were traded each day on the Tadawul over the past year, with a daily value of $2.5 billion. The exchange’s trading debut is expected in December.
“Both market values and trading liquidity are at a record high,” Farooq said. “The former feeds into the latter, so optically speaking seems like a great time to monetise” the company.
The benchmark Saudi stock index falls 1.9% on Sunday as last week’s retreat in oil prices weighed on market sentiment.