MBC Group IPO: Shares rise 30% in Tadawul trading debut

Saudi-based broadcaster raised $222 million from its offering last month

A flurry of initial public offerings in Saudi Arabia pushed the kingdom's bourse into a bull market last week. Reuters

Regional broadcaster MBC Group rose by as much as 30 per cent on its trading debut on Saudi Arabia’s Tadawul stock exchange on Monday as investors continue to bank on local listings amid a flurry of initial public offerings in the kingdom.

The company’s shares were trading at 32.50 Saudi riyals ($8.67) at 1.02pm UAE time, after opening trade at 25 riyals a share.

In December, the MBC Group raised 831 million riyals ($221.6 million) through the sale of its 10 per cent stake in a public offering on the Tadawul.

It priced 32.5 million shares at the top end of the indicative range at 25 riyals each.

The offering garnered robust investor demand from Saudi, regional and international investors, resulting in an order book of 54.5 billion riyals, and led to a subscription cover of about 66 times the number of total shares offered, MBC said on Monday.

“Through this IPO we welcomed new shareholders to the company and raised the capital needed to take us through our next phase of growth, innovation and impact,” said MBC Group chief executive Sam Barnett.

“We have a clear road map guiding us through what the next phase of growth looks like.”

The company remains focused on growing its subscriber base and viewers on Shahid, increasing advertising sales across its platforms and expanding operations into sub-sectors such as sports, music, gaming and events, Mr Barnett said.

The MBC Group received the market regulator’s approval on November 21 to list its shares on the Tadawul exchange, making it the latest among companies in the Mena region seeking to raise capital from the equities market amid a listing boom.

GCC stock markets recorded a flurry of listing activity last year, with some companies notching significant gains on their trading debut on the back of overwhelming investor demand.

There were a total of 29 IPOs with total proceeds of $5.8 billion in the first nine months of the year in the Mena region, with all the listing activity taking place in the GCC, according to the latest report from consultancy EY.

The GCC's performance “highlighted the importance of a strong pipeline of IPOs that are critical for attracting international capital flows and generating resilient market performance”, Kamco Invest said in a recent note.

“Both Saudi Arabia and Dubai exchanges saw IPOs of some of the key companies in the region garnering strong investor demand. The markets, especially Saudi Arabia, were also insulated from the decline in crude oil prices that is still essential for economic growth in the region,” it said.

MBC’s gains on its first day of trading underpin a sustained rally on the Tadawul, the biggest Arab bourse by market capitalisation, which last week entered a bull market.

The bourse ended 2023 up 14.2 per cent, the second highest among GCC markets after the Dubai Financial Market, which gained 21.7 per cent last year.