The Gulf Cooperation Council (GCC) region’s IPO market witnessed an increase in proceeds in the third quarter of 2024, despite a decrease in listing volume compared to Q3 of 2023.
In its latest IPO+ Watch, PwC Middle East says that the higher proceeds were driven by the sizable energy IPO from EPC solutions group NMDC Energy. The company marked the biggest IPO in the UAE so far this year, raising $877 million with a significant oversubscription rate. The remaining three IPO listings took place on Nomu, the Saudi Exchange (Tadawul) parallel market.
“As has been the case in recent years, Q3 has seen relatively few companies come to market. Since the end of the quarter, we have seen a number of IPOs either completed or announced across the GCC, including OQ Exploration and Production, Oman’s largest ever IPO, supporting the positive outlook for the remainder of 2024,” stated Muhammad Hassan, capital markets leader at PwC Middle East.
Healthy IPO pipeline signals growth
The three other IPOs raised a total of $27 million resulting in IPO proceeds of $904 million. The aftermarket performance for GCC companies completing an IPO in 2024 continues to be positive with the majority of the top 10 IPOs by deal size trading ahead of the IPO price.
Looking forward, the outlook for the GCC IPO market remains positive with a healthy IPO pipeline of companies from a diverse range of sectors busy preparing for their upcoming IPOs across the region.
Saudi Arabia is likely to see over 50 IPOs this year and has already seen 35 of these so far. Mohammed Al-Rumaih, CEO of Saudi Exchange, revealed the market forecast at the EFG Hermes 10th annual investor conference in London on the theme ‘A New Era of Opportunities’.
Bonds and sukuk market grows
PwC Middle East also revealed that the quarter also saw $4.4 billion raised through bonds, nearly a 30 percent increase when compared to the same period in 2023. Meanwhile, $5.2 billion was raised through sukuks, with 88 percent of these sukuks issued on either the Qatar Stock Exchange (QSE) or Nasdaq Dubai. Nearly 65 percent of bond and sukuk issuance this quarter derived from GCC governments.
Lulu Retail records largest UAE IPO in 2024
In the UAE, Abu Dhabi-based Lulu Retail Holdings PLC recently announced the successful conclusion of the book build and public subscription process for its IPO on the Abu Dhabi Securities Exchange (ADX). The company confirmed that the final offer price for its ordinary shares is set at AED2.04 per share, marking the upper limit of the previously specified offer price range. This pricing implies a market capitalization of the group at listing of AED21.07 billion.
Additionally, the offering generated gross proceeds of AED6.32 billion (around $1.72 billion), making it the largest IPO in the UAE for 2024 to date. It garnered aggregate demand exceeding AED135 billion (approximately $37 billion) from local, regional, and international investors — a record for a non-government IPO in the UAE over the last decade.
In addition, ADNH Catering made a total of 900 million shares available for its latest IPO, representing 40 percent of its total issued share capital. The IPO raised gross proceeds of AED864 million ($235.2 million), implying a market capitalization of AED2.16 billion at listing.
Read: Lulu Retail’s IPO raises $1.72 billion, share price set at $0.56
UAE leads region’s IPO growth
GCC markets saw seven initial public offerings (IPOs) in quarter three of 2024 that raised a total of $1.7 billion in proceeds. In its latest report titled ‘Initial Public Offerings (IPO) in the GCC markets’, Markaz revealed that GCC issuers have raised a total of $5.2 billion through 30 offerings during the first nine months of 2024, down from $6.8 billion through 29 offerings during the same period last year.
Markaz’s report also revealed that the UAE led the GCC region in terms of IPO proceeds in Q3, raising a total of $1.1 billion from one offering. This constituted 69 percent of total GCC IPO proceeds during the quarter. Meanwhile, Saudi Arabia’s IPO proceeds reached $512 million during the quarter with six offerings constituting 31 percent of total GCC IPO proceeds during the quarter.
As for the region’s exchanges, the Abu Dhabi Securities Exchange (ADX) recorded 69 percent of the total Q3 IPO proceeds with a total value of $1.1 billion listed on its Main Market. Saudi Arabia’s Tadawul saw a total of $459 million and $53 million on its Main Market and Nomu-Parallel Market, respectively, together constituting 31 percent of the total GCC IPO proceeds. Other exchanges in the GCC have not seen any listings during the quarter.
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