Saudi Arabia's Tadawul looks to raise $1bn from its initial public offering

The holding company, which received regulatory approval for listing this month, will complete the book-building process on November 26

Tadawul’s benchmark equities index has risen about 35 per cent since the beginning of the year, driven by new listings and improved investor sentiment on the back of higher oil prices. Reuters

Saudi Tadawul Group, the owner and operator of the kingdom’s stock exchange, is aiming to raise up to 3.78 billion Saudi riyals ($1bn) from its initial public offering.

The holding company has set the price range of its IPO between 95 riyals and 105 riyals per share, it said on Sunday in a statement to the Saudi Stock Exchange.

The company is selling 36 million shares, or 30 per cent, of its 120 million issued share capital to the public. The bidding and book-building period for investors will begin on November 21 and conclude on November 26.

“The final price per offer share will be determined after the completion of the book-building process, to be followed by the individual subscribers subscription process,” Tadawul said in the bourse filing.

The company, which received approval for the public float from Saudi Arabia's Capital Markets Authority on November 4, did not provide a date for the listing of its shares.

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 earlier this month. Citigroup, JP Morgan Chase and SNB Capital are financial advisers and global coordinators for the IPO.

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.

On November 9, the holding company increased the size of the offering for retail investors to 30 per cent, up from 10 per cent initially as it seeks to increase the participation of individual investors.

“Our aim is to provide an adequate opportunity to all types 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," he said at the time.

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.

Tadawul Group has four subsidiaries that include the Saudi Exchange, a dedicated arm running the kingdom's equity market previously known as the Saudi Stock Exchange Company; the Securities Clearing Centre Company (known as Muqassa); the Securities Depository Centre Company (Edaa); and a new subsidiary focused on applied technology services known as Wamid.

Tadawul’s benchmark equities index has risen about 35 per cent since the beginning of the year, driven by new listings and improved investor sentiment on the back of higher oil prices.

Energy company Acwa Power listed its shares on the Saudi Exchange last month after raising $1.2bn through its IPO. It was the kingdom's largest listing since state oil company Saudi Aramco went public in 2019.

The Saudi bourse is also home to Sabic, the biggest petrochemicals producer in the Middle East, and Saudi National Bank, the largest commercial lender in the kingdom, among others.