Abu Dhabi-based retailer Lulu Retail Holdings PLC (Lulu Retail) has officially begun trading on the Abu Dhabi Securities Exchange (ADX) today, following its Initial Public Offering (IPO) and is now listed under the ticker “LULU.”
Record-breaking IPO
The IPO for Lulu Retail generated gross proceeds of AED6.32 billion ($1.72 billion), marking it as the largest offering in the UAE thus far in 2024. The offering attracted a remarkable aggregate demand exceeding AED135 billion (around $37 billion) from local, regional, and international investors, setting a record for non-Government IPOs in the UAE over the past decade, with an oversubscription rate exceeding 25 times across all tranches (excluding Cornerstone Investors). Notably, Cornerstone investors included prominent sovereign and institutional investors from the GCC region.
Read more: Lulu Retail’s IPO raises $1.72 billion, share price set at $0.56
Strong retail participation
A historic 82,000 retail investors participated in the IPO, highlighting the strong consumer awareness and connection to the Lulu brand throughout the GCC. Approximately 50,000 individuals registered for an ADX National Investor Number (NIN) within the sixteen days following Lulu’s announcement of its Intention to Float (ITF), compared to 50,000 NINs issued for the entire year of 2023.
H.E. Ghannam Butti Almazrouei, chairman of ADX, commented that the successful listing of Lulu Retail Holdings on ADX exemplifies the UAE’s economic resilience and dynamism. He noted that it enhances ADX’s diverse sector offerings and opens the door for more consumer and retail issuers to utilize ADX’s platform, indicating that Lulu’s inclusion in ADX’s expanding portfolio signifies the UAE’s progress in fostering a robust, multi-sector economy.
Impact on Abu Dhabi’s financial landscape
As the largest IPO this year in the UAE, Lulu attracted tremendous demand from a global investor base, solidifying ADX’s position as a premier gateway for capital flows. This achievement aligns with ADX’s dedication to sustainable economic growth, reinforcing Abu Dhabi’s status as a leading financial hub and advancing the UAE’s long-term vision. ADX expressed pride in supporting Lulu Retail and all their listed companies as they contribute to the nation’s financial growth and prosperity, paving the way for a brighter economic future.
Commitment to growth
Yusuffali M.A., chairman of Lulu Retail, expressed immense pride in the listing on ADX, emphasizing that it is a significant moment for the entire Lulu team. He mentioned that many of their 55,000 employees have been with the company for years, showcasing their dedication to serving customers and expanding the business. He attributed this milestone to their employees’ unwavering commitment and acknowledged that their journey has been inspired by the aspirations and vision of regional leaders who support the growth and success of enterprises like Lulu. He expressed excitement about listing Lulu Retail in their home of Abu Dhabi and providing local and international investors with the opportunity to engage with the region’s growth potential.
Contribution to market capitalization
Abdulla Salem Alnuaimi, group chief executive officer of ADX, extended heartfelt congratulations to the Lulu Retail team on their successful listing. He further highlighted that Lulu’s achievement underscores the strength of the UAE economy and ADX’s role as a catalyst for growth and a listing platform. Moreover, he remarked that as the 100th listed company on ADX, Lulu has set a record for the largest private sector IPO by a home-grown company in the UAE. Additionally, he noted that Lulu’s addition to the ADX family contributes an additional AED21 billion to market capitalization and expressed satisfaction that international investors have participated in Lulu Retail’s offering through their home-based brokers, reflecting the increasing appeal of Abu Dhabi’s capital market. He also assured that ADX would continue to introduce strategic initiatives and innovative market solutions to cultivate a thriving marketplace, broaden investment opportunities, and support the long-term success of listed companies.
Unprecedented demand
Saifee Rupawala, chief executive officer of Lulu Retail, expressed pride in the strength of the Lulu brand and the company’s growth narrative, which resonated with many during the IPO, resulting in unprecedented demand of $37 billion and 82,000 retail investor subscriptions. He emphasized that while today marks a significant milestone for Lulu, their primary focus remains on delivering exceptional service and products to loyal customers, ensuring that Lulu continues to be the destination where the world comes to shop. He affirmed that their commitment to investing in growth is stronger than ever, highlighted by the opening of 16 new stores this year, with plans to further enhance and expand their store network and customer base across the region. He expressed confidence in achieving their guidance targets for 2024 and beyond and looked forward to sharing this journey with new shareholders globally.
Strategic growth initiatives
Lulu Retail’s growth strategy revolves around four key pillars: enhancing its existing store network, expanding its footprint, driving operational efficiencies, and creating revenue growth through private label and loyalty program expansion. Additionally, in 2023, it was the largest full-line retailer across the GCC in terms of selling space, retail sales value, and the number of stores, capturing a 13.5 percent share of the GCC modern offline grocery market.
National retail ranking
On a national scale, in 2023, Lulu Retail ranked as the second largest grocery retailer in the UAE and held the title of the largest retailer in Oman, Qatar, Bahrain, and Kuwait, in addition to being the fastest-growing retailer in the GCC region within Saudi Arabia.
Financial performance highlights
The Group has demonstrated a strong track record of top-line growth, reporting H1 2024 revenues of $3.9 billion, reflecting a 5.6 percent increase year-on-year, and full-year 2023 revenues of $7.3 billion, also up by 5.6 percent year-on-year. EBITDA for H1 2024 was $391 million, up 4.3 percent year-on-year, while EBITDA for 2023 totaled $753 million, representing a 7.2 percent increase year-on-year, with an EBITDA margin of 10.4 percent.
Advisory and management team
Moelis & Company UK LLP DIFC Branch served as the Independent Financial Advisor.
Abu Dhabi Commercial Bank PJSC, Citigroup Global Markets Limited, Emirates NBD Capital PSC, and HSBC Bank Middle East Limited acted as Joint Global Coordinators and Joint Bookrunners. Alrajhi Capital, EFG-Hermes UAE Limited, in collaboration with EFG-Hermes UAE LLC, First Abu Dhabi Bank PJSC, Goldman Sachs International, and International Securities L.L.C., served as Joint Bookrunners.
Moreover, Abu Dhabi Commercial Bank PJSC, EFG-Hermes UAE Limited, Emirates NBD Capital PSC, First Abu Dhabi Bank PJSC, and HSBC Bank Middle East Limited acted as Joint Lead Managers.
Abu Dhabi Commercial Bank PJSC and First Abu Dhabi Bank PJSC served as the Joint Lead Receiving Banks. Al Maryah Community Bank LLC, Dubai Islamic Bank PJSC, Emirates Islamic Bank PJSC, Emirates NBD Bank PJSC, Mashreq Bank PSC, and Wio Bank PJSC acted as Receiving Banks.
Gulf Bank K.S.C.P., National Investments Company K.S.C.P., SICO BSC (C), and Sohar International Bank SAOG acted as Co-Lead Banks.
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