Saudi First Milling Co’s IPO Attracts $18 Billion in Order

Saudi Arabia’s market-leading First Milling Company, which announced the offer price range of its Initial Public Offering (IPO) on 18 May 2023, along with its financial advisor SNB Capital, on Tuesday said that it has successfully completed book-building exercise along with participating parties.

In compliance with the guidelines of the Capital Market Authority (CMA), Frts Mills has announced the final offer price for the IPO at $16 per share, implying a market capitalization of $888 million. The book-building process generated an order book of $18.35 billion and resulted in a subscription coverage of 68.9 the total offered shares.

In his comments, Abdullah Ababtain, Chief Executive Officer of First Milling Company, said that the impressive demand by participating parties for the company’s offer shares is a resounding validation of its investment thesis.

“We are honoured by this strong vote of confidence from the diverse group of distinguished institutional investors and look forward to welcoming them into our shareholder base,” the CEO said.

Offer Details

The total Offering size is $266 million. Once listed, the company is expected to have a free float of 30% of the entire issued share capital of the company.

The Offering is comprised of 16,650,000 existing ordinary shares of the Company to be sold by the current shareholders. All 100% of the offer shares have been provisionally allocated to the participating parties that took part in the book-building process and this may be reduced to 14,985,000 offer shares (representing 90% of the total offer shares) depending on the level of 1 FX Rate throughout announcement is USD/SAR 3.75.

“The Saudi Arabian nationals, foreign residents in the Kingdom and GCC nationals in each case who has a bank account with a receiving agent and has the right to open an investment account with a capital market institution (Individual Investors) will be able to subscribe for shares in the retail offering from 6 to 7 June 2023 at the final offer price of $16 per offer through the appointed receiving agents which are Saudi National Bank (SNB), Alinma Bank, and Al Rajhi Bank,” First Mills said in a statement.

Second Biggest IPO

According to a Bloomberg report, the IPO is set to be the second biggest in Saudi Arabia this year, after generic drugmaker Jamjoom Pharmaceuticals Factory Co.’s $336 million offering. That deal also priced at the top of the range last week and got institutional investor orders for 67 times the shares on offer.

Saudi IPOs are returning to life after their slowest start since 2014 amid concerns over falling oil prices and a global economic slowdown. The benchmark Tadawul All Share Index has rebounded about 12% from a March low, helping boost investor sentiment, the report said.

“Just $72 million worth of IPOs have started trading in the Kingdom so far this year, a sharp drop from the almost $4 billion seen a year ago,” the report added.