Hypermarket operator Lulu Retail Holdings Plc had successfully raised US$1.72 billion, or RM7.49 billion, from its initial public offering in Abu Dhabi, placing it as the largest listing this year in the United Arab Emirates. According to the statement by the company, the group sold 3.1 billion shares amounting to 30 percent in the company at 2.04 dirhams per share. This price was at the top of the marketed range with strong investor demand coming out at 135 billion dirhams.
PC: Gulf Insight 360
The company had initially aimed to sell a 25 per cent stake to mop up to $1.43 billion. But Lulu increased the number of shares put up for sale citing massive interest from regional as well as international investors, and just days before the listing. Cornerstone investors have been a huge demand for the retailer. A very important source that is made up of Masarrah Investment Co in Saudi Arabia, the Abu Dhabi Pension Fund, Bahrain Mumtalakat Holding Company Co, Emirates International Investment Co, and Oman Investment Authority have all taken over a total share amounting to over a billion dirhams.
There is huge interest that has driven in all the subscribed shares an hour after book opening last week. In fact, this is a huge IPO listing since NMDC Energy, an oil services firm, raised 877 million, a milestone the UAE markets have never equaled to date.
Lulu’s IPO is just one of the recent public listings by the private sector in the Middle East. As far as the investors in this region are concerned, options are becoming even more varied beyond state-owned enterprises, with some other companies expected to be listed in the UAE this year, such as Talabat, Delivery Hero SE’s Middle East unit, and IT services firm Alpha Data.
There would be much hype in the Gulf region IPO markets in 2023 and one such most-awaited go-public transaction is Lulu’s, whose shares were to commence trading on November 14 and had a valuation of around $5.74 billion market capitalization-a valuation highly indicative of that established company position in a hypermarket operator across a region.
In an earlier listing this year, high-end supermarket chain Spinneys 1961 Holding plc completed its listing in Dubai and raised $374 million. But unlike the tremendous demand that has been witnessed on Lulu, the stock of Spinneys was rather sedate on the market since its listing, trading close to the offer price.
The underwriting for the IPO is provided by the following financial giants that serve as joint global coordinators, Abu Dhabi Commercial Bank PJSC, Citigroup Inc, Emirates NBD Capital, and HSBC Holdings plc. Moelis & Co also advised on the deal.
Lulu’s successful IPO underscores an increased demand for investment in private sector companies within the Middle East, as the investor interest in the economic climate of the region remains optimistic.
