Share
Home Sector Markets Lulu Retail’s IPO raises $1.72 billion, share price set at $0.56

Lulu Retail’s IPO raises $1.72 billion, share price set at $0.56

The offering garnered aggregate demand exceeding $37 billion from local, regional, and international investors
Lulu Retail’s IPO raises $1.72 billion, share price set at $0.56
The IPO was oversubscribed by more than 25 times across all tranches, excluding Cornerstone Investors.

Abu Dhabi-based Lulu Retail Holdings PLC has announced the successful conclusion of the bookbuild and public subscription process for its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX). 

According to a statement, the company has confirmed that the Final Offer Price for its ordinary shares is set at AED2.04 per share ($0.56), 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 (approximately $5.74 billion). 

Additionally, the Offering has 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. The IPO was oversubscribed by more than 25 times across all tranches, excluding Cornerstone Investors.

Retail investor interest was exceptionally strong, with over 82,000 retail investors participating in the Offering, setting a new record for UAE IPOs in the past ten years. The shares are expected to be admitted for trading on the ADX on Thursday, November 14, 2024, marking Lulu Retail’s listing as the 100th on the exchange.

Confidence in investor trust

Saifee Rupawala, chief executive officer, Lulu Retail, expressed pride in the significant demand for the Lulu Retail IPO, which raised over $1.72 billion and attracted total aggregate demand of approximately $37 billion. He noted that this was a clear indication that investors share the company’s enthusiasm. He further mentioned the company’s eagerness to honor the trust placed in them by investors and expressed confidence in meeting their guidance targets for 2024 and beyond. Rupawala highlighted that the high demand reflects Lulu Retail’s compelling investment appeal and iconic brand, supported by their strong market position in the GCC, commitment to exceptional customer service, solid financial performance, and a well-articulated growth strategy. He also shared excitement over the record interest from UAE retail investors, welcoming all new shareholders and looking forward to their journey together.

Lulu Retail IPO
Saifee Rupawala, CEO, Lulu Retail. (Photo Credit: Lulu Retail Holdings)

Expansion of offering

Earlier this week, Lulu Retail Holdings announced an expansion of its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX). The total offering size has been revised to 3,098,671,605 ordinary shares, an increase from the previously announced 2,582,226,338 shares. This adjustment further means that the offering now represents 30 percent of the company’s total issued shares (the Offer Shares), up from the previous 25 percent, with shares being sold by the company’s sole shareholder, Lulu International Holdings Limited (the Selling Shareholder).

Allocation of additional shares

The additional 516,445,267 Offer Shares have been allocated entirely to the Qualified Investor Offering (Tranche Two), which is designated for Professional Investors only, as defined in the Local Prospectus. The Offer Price Range remains unchanged, set between AED1.94 and AED2.04 per share. If all offered shares are sold, the total offering size is now projected to be between AED6.01 billion (approximately $1.64 billion) and AED6.32 billion (approximately $1.72 billion). Based on this price range, Lulu Retail is expected to list with a market capitalization between AED20.04 billion (approximately $5.46 billion) and AED21.07 billion (approximately $5.74 billion). The final offer price will be determined through a book-building process, with an announcement anticipated on Wednesday, November 6, 2024. Trading of Lulu Retail shares on ADX under the ticker symbol LULU is expected to commence on Thursday, November 14.

Inclusion of Cornerstone Investors

Furthermore, Lulu Retail has announced this week the inclusion of Masarrah Investment Company (Masarrah Invest) as a Cornerstone Investor, joining previously announced investors: (i) Abu Dhabi Pension Fund (ADPF), (ii) Bahrain Mumtalakat Holding Company Co. B.S.C. (Mumtalakat), (iii) Emirates International Investment Company LLC (EIIC), and (iv) Oman Investment Authority (OIA). 

Read more: Lulu Retail IPO size increased to 30 percent on ADX

Masarrah Invest’s profile and commitment

Masarrah Invest, a leading investment holding company based in Saudi Arabia, has over seventy years of experience in fostering partnerships between the public and private sectors. Founded by Sh. Mutlaq Almutlaq and led by Managing Director Mr. Tariq Almutlaq, the company emphasizes talent equity, robust governance, stakeholder value, innovation, and integrity. Masarrah Invest has diversified interests across numerous sectors, including agro specialty chemicals, plastics, real estate, power and water, industrial gases, logistics, district cooling, recycling, and social infrastructure.

In line with Saudi Arabia’s Vision 2030, Masarrah Invest is actively expanding its partnerships within the Gulf Cooperation Council and globally to capitalize on new opportunities. The company is committed to sustainability and impactful investments, playing a significant role in Saudi Arabia’s economic development through innovative and strategic growth. Moreover, Masarrah Invest has pledged to invest approximately AED250 million (around $68 million). The total commitments from all Cornerstone Investors, as outlined in the Cornerstone Investor Agreements, amount to approximately AED1,003 million (around $273 million), with EIIC committing to invest $100 million. The shares allocated to Cornerstone Investors will be subject to a 180-day lock-up period following the listing.

For more news on markets, click here.

The stories on our website are intended for informational purposes only. Those with finance, investment, tax or legal content are not to be taken as financial advice or recommendation. Refer to our full disclaimer policy here.