Saudi Stock Exchange Seeks to Raise Up to $1 Billion in IPO

(Bloomberg) -- Saudi Arabia is keeping the home fires burning for regional public offerings, readying what could be the biggest sale of shares by a stock-exchange operator since Euronext NV.

Saudi Tadawul Group Holding is seeking to raise as much as $1 billion after setting the price range for an initial public offering at 95 riyals ($25.32) to 105 riyals per share, the company said Sunday. The Riyadh-based bourse, on which oil giant Saudi Aramco trades, plans to sell a 30% stake, or 36 million shares.

The offering comes amid an IPO boom, with companies around the world raising a record of more than $600 billion this year. Against that backdrop, Saudi Arabia has been among the leaders in the Middle East, listing private and family-owned firms as well as companies such as ACWA Power International, backed by the kingdom’s wealth fund, and Saudi Telecom Co.’s internet-services unit. Neighboring Abu Dhabi and Dubai have also been stepping up efforts.

“This will surely keep investors on Tadawul excited,” said Junaid Farooq, a fund manager at Frontier Investment Management Partners Ltd. in Dubai. “Government policy is highly supportive of private businesses listing on the exchange and there are over 60 planned IPOs in the pipeline over the next three years.”

Long Time Coming 

Tadawul’s IPO has been on the cards since at least 2016, when it hired HSBC Holdings Plc as an adviser. It put the offering on hold while the exchange went through a process of increasing access for foreign investors, and then staged the listing of Aramco in 2019, the largest ever.

The process was resumed earlier this year and Tadawul replaced HSBC with Citigroup Inc., JPMorgan Chase & Co., and SNB Capital as financial advisers and global coordinators. It’s set to be the biggest offering in the exchanges sector since Euronext’s $1.2 billion IPO in 2014.

An average of 254 million shares were traded each day on the Tadawul over the past year, with a daily value of $2.5 billion. The exchange’s trading debut is expected in December.

“Both market values and trading liquidity are at a record high,” Farooq said. “The former feeds into the latter, so optically speaking seems like a great time to monetize” the company.

The benchmark Saudi stock index fell 1.9% on Sunday as Friday’s retreat in oil prices weighed on market sentiment.

More details on the IPO:

• Subscription period for institutional investors: Nov. 21-26
• Subscription period for retail investors: Nov. 30 to Dec. 2
• Final offer shares allotment: On or before Dec. 6
• IPO proceeds will go to the Public Investment Fund, the exchange’s sole shareholder
• Click here for link to IPO information

(Updates prices in last paragraph, and adds Euronext IPO size in sixth paragraph.)

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