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 Saudi Retal Urban Development offers $32 per share


Saudi Retal Urban Development offers $32 per share

Saudi Arabia’s capital market’s strong momentum with a new Initial Public Offering (IPO) from the local real estate developer, Retal Urban Development Company, which has set the final offer price for its initial public offering at $32 a share targeting a market capitalisation of $1.28 billion.

The book-building process generated an order book of $ 24 billion and resulted in a subscription of coverage of 62.7x the total offered shares notwithstanding global uncertainty due to new cases of COVID-19 and war in Ukraine.

The company will raise $384 million through the sale of 30% of its share capital, Retal said in a statement on Sunday. IPOs in the GCC region have raised $8.76 billion in the first five months of 2022, according to data released by Refinitiv.

Saudi Arabia’s IPO market has been more lucrative for investors as the domestic companies have raised more than $9 billion through IPOs in 2022.

In fact, Saudi Arabia’s Stock Exchange (Tadawul) CEO Mohammed Al Rumaih said 16 firms have already been listed so far, three listing applications are still pending approvals, he told the Saudi Capital Market Forum (SCMF) 2022 held in March this year.

Besides, more than 70 share listing requests from companies operating in different business fields are being reviewed, said Al Rumaih, adding that each share listing noticeably attracts new local or foreign retail and institutional investors.

The huge success met with by Saudi Aramco’s IPO when the firm raised a record $29.4 billion in November 2019 continued and the kingdom has witnessed a surge in IPOs with 15 IPOs in 2021.

Robust Demand

Abdullah bin Faisal bin Abdulaziz Al-Braikan, Chief Executive Officer of Retal Development Co., commented: “The robust demand for Retal’s shares reflects the attractiveness of our scalable business model and highlights the investor appetite for next generation real estate development companies such as ours. It also shows strong investor confidence in our growth strategy and our ability to tap into the significant long-term opportunities in the Saudi real estate and housing market.

Our goal is to increase the availability of housing in Saudi Arabia in-line with Vision 2030. We want to offer every Saudi the opportunity to live in our communities across the country, from East to West, from affordable to luxury.”

He further said: “We have successfully completed over 30 projects in the last decade, and currently have 7,000 units executed and under construction, with a further 6,000 units in our backlog to be completed over the next two years. We look forward to welcoming our new institutional and retail investors to join us in the next chapter of our long-term growth.”

The planned listing builds on the strong momentum for Saudi Arabia’s IPO market, despite global market volatility triggered by the Russia-Ukraine war.

The individual investors tranche subscription process, which started on June 5, will end on June 6, the company said in a bourse filing on Sunday. These investors will be able to purchase a maximum of 1.2 million shares, representing 10% of the total offer shares, it said.

SNB Capital Financial Adviser

SNB Capital is the financial adviser, lead manager, bookrunner and underwriter on the planned IPO while receiving banks include SNB, Riyad Bank and Bank Albilad.

Investors approved by the Saudi market regulator CMA, Saudi citizens, GCC citizens and foreign residents in Saudi Arabia with an active bank account with one of the participating banks, are eligible to subscribe to the offering, the company said.


Global business magazine

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