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Lulu Retail Holdings Plc’s shares fell after its $1.72 billion initial public offering, a rarity in the Middle East where listings have typically offered stellar returns in early trading.
Author of the article:
Bloomberg News
Laura Gardner Cuesta
Published Nov 14, 2024 • 2 minute read
(Bloomberg) — Lulu Retail Holdings Plc’s shares fell after its $1.72 billion initial public offering, a rarity in the Middle East where listings have typically offered stellar returns in early trading.
The hypermarket chain operator fell to as much as 1.99 dirhams ($0.54) per share in its Abu Dhabi trading debut, down 2.5% from the offer price of 2.04 dirhams.
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The muted debut comes two weeks after Oman’s OQ Exploration & Production dropped 8% in its debut after a record $2 billion offering.
Lulu – the United Arab Emirates’ largest IPO of the year — had demand for all shares an hour after books opened last month. Its owners subsequently boosted the size of the deal to offer a 30% stake from 25% earlier.
The share sale drew sovereign wealth funds including Saudi Arabia’s Public Investment Fund and Singapore’s GIC Pte, over and above commitments worth over 1 billion dirhams from cornerstone investors.
Also Read: Billionaire Ali’s Record IPO Spotlights UAE’s India-Born Tycoons
The share sale that overtook oil services firm NMDC Energy’s $877 million offering as the UAE’s biggest IPO of the year, comes amid a boom in listings in the region that’s seen firms raise around $10 billion this year.
A slew of Middle Eastern private sector firms are eyeing listings, as local economies look to diversify away from oil.
High-end supermarket chain Spinneys 1961 Holding Plc raised $374 million from its Dubai IPO in May, and Delivery Hero SE’s Middle Eastern unit Talabat plans to list this year, in a deal that could value it higher than its parent.
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Billionaire Founder
Lulu’s share sale boosted founder Yusuff Ali’s net worth to $7.1 billion, cementing his position as the UAE’s second-richest private individual, according to the Bloomberg Billionaires Index.
India-born Ali arrived in the UAE in 1973 and opened his first grocery store a year later. Lulu has since grown into one of the Middle East’s largest hypermarket chains and reported a profit of $192 million last year. It serves over half a million shoppers a day from 240 stores in six countries across the Gulf, and employs more than 50,000 people.
Ali turns 69 on Friday, a day after Lulu’s trading debut.
Abu Dhabi Commercial Bank PJSC, Citigroup Inc., Emirates NBD Capital and HSBC Holdings Plc acted as joint global coordinators on Lulu’s offering. Moelis & Co. was an advisor on the deal.
—With assistance from Kateryna Kadabashy.
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