UAE retail giant Lulu Group expects up to 10 per cent revenue growth this year with plans to open new stores in the Gulf region as it moves forward with its initial public offering on the Abu Dhabi Securities Exchange.
This week, Lulu Group revealed plans to list 25 per cent of its share capital on the Abu Dhabi bourse amid the continued economic momentum and listing boom in the Emirates.
The hypermarkets operator plans to float 2,582,226,338 shares with a nominal value of Dh0.051 ($0.014) each, it said on Monday. All shares offered through the public float are being sold by the company’s sole shareholder, Lulu International Holdings.
The company projects 8 to 10 per cent annual growth in revenue for this year, as it continues to grow its business, its chief financial officer Prasad KK told The National.
“The UAE is our main market and KSA [Kingdom of Saudi Arabia] is our growth market. We are growing across the two markets,” he said.
The company's revenue in the first half of this year rose 5.6 per cent to $3.9 billion, after it reported a 5.6 per cent annual increase in revenue last year to $7.3 billion.
The UAE accounts for 36 per cent of its total revenue, followed by Saudi Arabia at 19 per cent and Oman at 17 per cent, he added.
The company did not announce the price range or how much it plans to raise through the IPO but its chief executive Saifee Rupawala said there has been an “immense response” for the IPO from international as well as regional and local investors.
The subscription period for the public float will open on October 28 and will end on November 5 for retail, institutional and senior executive tranches.
The final offer price will be determined through a book-building process and Lulu Group expects its shares to begin trading on the ADX “on or around” November 14, according to a previous statement from Lulu.
The Abu Dhabi-based company, which had 240 stores as of August, plans to open an additional eight this year in the UAE, Saudi Arabia and Oman. It has opened 13 stores in the Emirates so far this year and aims to add about 19 outlets in 2025, mainly in the UAE and Saudi Arabia.
“We have got a lot of opportunity to expand, especially in Saudi Arabia and the UAE,” Ashraf Ali, executive director of Lulu Group, told media in Abu Dhabi on Tuesday.
“Saudi Arabia is the biggest market … so we have got a big room to develop there. We are only present in 14 cities. We have identified 33 cities to develop in Saudi Arabia even in the interior pockets and clusters and secondary cities.”
Saudi Arabia is diversifying its economy away from oil as part of its Vision 2030 programme and is focusing on attracting more foreign investment into the kingdom in sectors including retail, tourism, technology and property.
“When you look into the UAE perspective, there is a lot of development … a lot of migration is happening. We are already working with all our real estate developers that will expand our portfolio,” Mr Ali said.
No impact on prices
MA Yusuff Ali, chairman of Lulu, said the IPO will not have any impact on its retail pricing model and the group will continue to maintain competitive rates across it outlets.
The priority is the availability of products and “we want to bring the competitive price in good quality. Now we are doing that, so we hope that this will continue”, he said during the media briefing.
Lulu sources food products from 90 countries and will continue to “support our consumers” with an uninterrupted supply of goods, the chairman added.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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MATCH INFO
Uefa Champions League semi-final, first leg
Tottenham 0-1 Ajax, Tuesday
Second leg
Ajax v Tottenham, Wednesday, May 8, 11pm
Game is on BeIN Sports
'Shakuntala Devi'
Starring: Vidya Balan, Sanya Malhotra
Director: Anu Menon
Rating: Three out of five stars
