Saudi Arabia's Avalon Pharma raises $131m in Tadawul listing

Final offer price set at 82 riyals per share, valuing the company at 1.64 billion riyals

Riyadh's skyline. Avalon Pharma’s listing would be the latest in a string of IPOs on the Tadawul, the biggest Arab bourse by market value. EPA

Riyadh-based Avalon Pharma said it raised 492 million Saudi riyals ($131 million) in its initial public offering after pricing its shares at the top of the range.

The company set the final offer price at 82 riyals per share, for its listing of a 30 per cent stake. The pricing values the company at 1.65 billion riyals.

Total gross demand for the offering amounted to 2.67 billion riyals, implying an oversubscription level of about 5.4 times, the company said on Wednesday.

"Based on the results of the retail subscription process, the number of shares designated for participating parties will be decreased to 5.4 million, representing 90 per cent of the total offering", the company said.

Last month Avalon announced plans to list six million shares on the Tadawul stock exchange, amid plans to expand globally.

The Aldukheil Financial Group acted as financial adviser and bookrunner, while Alinma Investment the lead manager on the deal.

Avalon, which began operations in 1998, is involved in the manufacturing and marketing of a wide range of consumer health and beauty brands as well as generic prescription medicines.

The company exports products to more than 10 countries across the Middle East and North Africa and is one of the fastest growing consumer pharma companies in Saudi Arabia.

The IPO is the “next step in the maturity of our company and something we have been considering for the past few years”, chief executive Mohamed Al Ghannam told The National in an interview this month.

“Through the listing of the shares, we increase visibility and in the long term, we can access potential sources of funding if needed.”

The company, which recorded 338 million riyals in revenue last year, seeks to double that amount by 2027 and reach 1 billion riyals in revenue by 2030.

Avalon Pharma’s listing would be the latest in a string of IPOs on the Tadawul, the biggest Arab bourse by market value.

In December, regional broadcaster MBC Group raised 831 million riyals in an IPO after pricing it at the top of the range.

SAL Saudi Logistics Services Company’s began trading on Tadawul on November 1 after raising $678 million from its public float.

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.