Within hours of opening the books for its initial public offering (IPO) in Riyadh, cargo firm SAL Saudi Logistics Services Co. received orders for all of its shares.
According to Bloomberg, order books were fully subscribed across the price range within a few hours. The sources requested anonymity as the matter is considered private.
Moreover, SAL’s main shareholders said they were planning to sell a 30 percent stake in the company through an IPO. The IPO has the potential to raise up to 2.54 billion riyals ($678 million).
Read more: Saudi logistics firm SAL to go public as owners list 30 percent stake
Moreover, upon listing on the main market of the Saudi Exchange (Tadawul), SAL is expected to have an implied market value ranging from $2.09 billion to $2.26 billion, depending on the final offer price.
Additionally, the bookbuilding period for institutional investors will take place from September 25 until October 1, while retail investors will have the opportunity to participate from October 11 to October 13.
Middle East IPOs
In 2022, IPOs in the Middle East generated over $23 billion in funds, a significant increase from the previous year’s 20 offerings which raised $7.52 billion.
This marked the Gulf region’s highest share since 2019 when Saudi Aramco conducted its historic $29 billion IPO, the largest in the world.
Recently, Ades Holding, an oil driller based in Saudi Arabia, received an impressive $76.5 billion in orders for its $1.2 billion IPO, making it the country’s largest IPO of the year.
Surge in Saudi IPOs
Amidst a swift economic recovery from the pandemic-induced slowdown and bolstered by high oil prices, Saudi Arabia, the largest economy in the Arab world, along with the broader GCC region, has witnessed a surge in IPOs. This surge comes in response to strong investor demand.
In Q2 2023, the MENA region’s stock exchanges experienced a notable 44 percent annual increase in the volume of IPOs. Also, this growth can be attributed to the region’s robust economic expansion, as reported by global consultancy firm EY.
Defying global slowdown
Furthermore, according to EY, the growth in IPO deals in the MENA region was primarily led by Saudi Arabia and the UAE, the top economies in the region.
In addition, during the three-month period ending in June, the number of listings increased to 13, defying the global slowdown observed in equity capital markets activity, as noted in the report.
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