Saudi Arabia's Tadawul increases size of its shares offered to retail investors in IPO

The move is aimed at increasing the participation of individual investors in the initial public offering

A Saudi investor monitors the stock exchange at the Saudi Stock Exchange, or Tadawul, on December 14, 2016  in the capital Riyadh. / AFP PHOTO / FAYEZ NURELDINE

Saudi Tadawul Group, the owner and operator of the kingdom’s stock exchange, said it has increased the size of the offering for retail investors to 30 per cent, up from 10 per cent that were offered initially, as it seeks to increase the participation of individual investors.

The holding company plans to sell 36 million shares or 30 per cent of its 120 million issued share capital to the public, it said in a statement earlier this week.

“Our aim is to provide an adequate opportunity to all type of investors in the Saudi equity market to participate in the offering," Khalid Al Hussan, chief executive of Saudi Tadawul Group, said.

"Individual investors’ demand has been high, as seen during recent IPOs in Saudi Arabia, and we wanted to seize this momentum to encourage diversity in our shareholding structure post listing."

Saudi Tadawul Group's shares will be listed on the main index of the Saudi Exchange once offering and listing formalities are completed, the company said this month. The date of the listing was not provided.

The company, which received approval for the public float from the Saudi Arabia's Capital Markets Authority on November 4, said the final offering price will be determined at the end of the book-building period. It did not provide the timeline of the book-building process.

The kingdom’s sovereign wealth fund, the Public Investment Fund, which is the sole owner of the company, is selling the shares that will be offered to both retail and institutional investors, Tadawul said.

Tadawul, which is among the top 10 global stock markets, with a market capitalisation of about $2.8 trillion, will become only the third publicly traded regional stock exchange after the Dubai Financial Market and Boursa Kuwait, once it is listed.

Updated: November 9th 2021, 4:14 PM