Saudi developer Retal prices $384m IPO at top of range

The final offer price of $32 per share implies a market capitalisation of $1.28bn, the company says

The planned listing of Retal Urban Development builds on the strong momentum of Saudi Arabia's IPO market. Photo: Reuters
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Saudi Arabia's real estate developer, Retal Urban Development, has set the final offer price for its initial public offering at 120 Saudi riyals ($32) a share, the top of the indicated range, implying a market capitalisation of 4.8 billion riyals ($1.28bn).

The public float received orders of 90.3bn riyals, oversubscribed almost 63 times, the company said in a statement on Sunday.

The company will raise 1.44bn riyals ($384 million) through the sale of 30 per cent of its share capital, the company said.

"The robust demand for Retal’s shares reflects the attractiveness of our scalable business model and highlights the investor appetite for next-generation real estate development companies such as ours," said Abdullah Al-Braikan, chief executive of Retal Development.

"It also shows strong investor confidence in our growth strategy and our ability to tap into the significant long-term opportunities in the Saudi real estate and housing market."

The planned listing builds on the strong momentum for Saudi Arabia's IPO market, despite global market volatility triggered by the Russia-Ukraine war.

Gulf issuers have raised $8.76bn from IPOs so far this year, Refinitiv data showed in May.

Saudi companies raised almost $9.3bn from share offerings last year, making it one of the most active IPO markets in the Middle East and Africa, according to data compiled by Bloomberg.

The kingdom has witnessed a surge in IPOs since it listed oil major Saudi Aramco in a record $29.4bn listing in 2019. There were a record 15 IPOs in 2021, bringing the number of issuers on the Saudi Exchange to 210.

Retal announced on May 9 its intention to float shares on the Saudi Tadawul stock exchange.

The individual investors tranche subscription process, which started on June 5, will end on June 6, the company said in a bourse filing on Sunday.

Individual investors will be able to purchase a maximum of 1.2 million shares, representing 10 per cent of the total offer shares, it said.

SNB Capital is the financial adviser, lead manager, bookrunner and underwriter on the planned IPO.

Receiving banks include SNB, Riyad Bank and Bank Albilad.

Investors approved by the Saudi market regulator CMA, Saudi citizens, GCC citizens and foreign residents in Saudi Arabia with an active bank account with one of the participating banks, are eligible to subscribe to the offering, the company said.

The developer currently has 7,000 units executed and under construction, with a further 6,000 units in its backlog to be completed over the next two years, according to its website.

The company, which employs 1,000 people, said the value of total projects (completed, ongoing and upcoming) reached 9.5bn riyals.

Updated: June 05, 2022, 12:28 PM