Al Majed for Oud is planning to list 30% of its shares on Tadawul, joining the growing number of Gulf companies heading to public listings on the stock exchange.
Anticipated Offering
The Saudi company will sell 7.5 million shares on the main market (TASI). The final offering price will be determined through a book-building process scheduled to take place between August 25 and 29.
The company will not receive any portion of the offering proceeds. The capital will instead be distributed to selling shareholders.
So what
Al Majed for Oud stated that all offering shares will be allocated to institutional investors.
If there is demand from retail investors, 20% of the total offering, equivalent to 1.5 million shares, will be allocated to them.
The retail subscription period will begin on September 15 and last for one day.
Al Majed for Oud was founded in 1982, with its headquarters located in Riyadh. Its current capital is approximately SAR 250 million, and it produces over 600 fragrance and oud products.
The company operated 237 stores in Saudi Arabia and 49 in the Gulf region by the end of last year. Its revenues grew by about 30% year-on-year in 2023, reaching SAR 767 million, driven by a 64% increase in fragrance revenues during that period.
Some context
Youssef Kassantini, Senior Portfolio Manager at Watheeq Capital, noted that offerings are positive when they coincide with a market upswing.
He explained that the strength of the offering is derived from the strength of the market, and the Saudi stock exchange is currently in an upward trend.
In an interview with Al Arabiya Business, Kassantini added that Al Majed for Oud’s products are in demand across the Gulf region.
With the company’s growth and expansion in the Gulf, it will need more liquidity to expand aggressively in the region and increase its online sales.
He expects a strong demand for its products and a successful offering.
Now what
A recent report by consulting firm Ernst & Young (EY) revealed that Saudi Arabia continues to dominate IPO activity in the Middle East and North Africa region during the second quarter of this year.
Saudi Arabia accounted for 11 of the 14 IPO deals in the region, raising approximately USD 2.6 billion, a 45.3% increase compared to the same period in 2023.
The report highlighted that Saudi IPOs raised a total of USD 1.6 billion, supported by increased liquidity driven by high oil prices, economic recovery, and positive investor sentiment.
The largest IPO in the region was the listing of Dr. Soliman Abdul Kader Fakeeh Hospital, which raised USD 764 million.
EY predicts that the Middle East and North Africa will witness 23 IPOs during the remainder of 2024, including 16 companies and seven funds across various sectors, with the lion’s share going to the Saudi market.
The “strong activity” in the Gulf IPO market comes amid a slowdown in the number and value of global IPOs during the second quarter of this year.
The number of global IPOs decreased by 15% year-on-year, while the returns from these IPOs dropped by 31% to USD 27.8 billion.
