Athira Sethu
Kochi, 5 November 2024
The largest hypermarket chain in the Middle East, Lulu Retail Holdings, has said that it has increased the planned size of its initial public offering (IPO) from 25% to 30% after receiving high interest from both foreign and regional investors.
Lulu Retail is likely to raise as much as 6.32 billion dirhams, or about $1.72 billion through its proposed IPO. This will make it the biggest IPO in the UAE for this year.
Lulu plans to issue 3.098 billion shares at an indicative price range of 1.94 to 2.04 dirhams per share. The final price for the shares will be announced on November 6. Meanwhile, Lulu Retail has said that investment company Masarrah Investment based in Saudi Arabia will invest about $68 million as a new cornerstone investor.
Adding to the total commitments from cornerstone investors, the total has now reached $273 million. Besides these cornerstone investors, other notable investors in the deal are the Abu Dhabi Pension Fund and Emirates International Investment Company (EIIC) from Abu Dhabi. It also includes sovereign wealth funds from Bahrain and Oman.
The IPO price range indicates that the Abu Dhabi Securities Exchange’s market capitalization of Lulu Retail will be somewhere in the range of $5.46 billion and $5.74 billion. It is expected to list on November 14. The Gulf region has seen several IPOs, with 30 IPOs taking place in the Middle East and North Africa during the first nine months of the year.
According to LSEG data, these IPOs collectively raised around $5 billion. Lulu Retail’s decision is also a reflection of the rising interest and investment in the region, and the future IPO is likely to generate even more investors’ interest, analyst said.
In general, Lulu’s decision to expand the IPO size reflects the company’s growth potential and the market’s confidence, they added.
