Abu Dhabi-based retail major LuLu may go for a listing on the Saudi stock exchange Tadawul, the Group’s top executive indicated.
“It [a possible listing on Tadawul] could happen in the “long-term,” LuLu Group chairman Yusuff Ali MA told Zawya.
Revelations on possible new plans come close on the heels of Lulu announcing its Abu Dhabi IPO (initial public offering) plans.
“We were always going to move ahead with a listing on the ADX first. This is our primary market. Lulu is an Abu Dhabi-based company, and sovereign investor ADQ owns a 20 per cent stake in the company.
“In fact, we have never confirmed plans for a dual listing,” Zawya quoted Yusuff Ali as saying.
The LuLu chairman said the company had done a study of all exchanges in the GCC, and Abu Dhabi was the strongest.
“That said, Saudi Arabia is a very important market for Lulu, and we may consider a listing there as part of our long-term strategy. But there is no set timeline for that,” he said.
As per its Abu Dhabi IPO plans, Lulu Retail Holdings will sell 2.58 billion shares, representing 25 per cent of its stake through a three-tranche IPO that will start on October 28 and close on November 5.
The company will list its shares on the Abu Dhabi Securities Exchange (ADX) on November 14.
The issue is expected to mop up around $2 billion.
IPO fuels Lulu expansion
Proceeds raised from the IPO will allow Lulu International Holdings, the sole shareholder in Lulu Retail, to map out a growth strategy, which includes increasing the number of stores in the GCC from 240 to 270 by Q4 2025.
The company will also look at refinancing its debt, which includes an AED 10 billion ($2.72 billion) capital raise in 2023, the Zawya report said.
“We are currently looking at developing the brand across 33 cities across Saudi Arabia. There is also a lot of development happening in the UAE as well,” the report cited Ashraf Ali MA, Lulu Group Executive Director, as saying.
“India is also a strong focus for LuLu Holding and there are expansion plans being developed to capitalise on this,” he said.
Developing Lulu’s private label brand, which currently makes up for 29 per cent of total sales, is also a focus.
Investor allocation strategy revealed
Ten per cent of the IPO allocation has been reserved for retail investors.
Eligible employees could enjoy a higher minimum allocation of 2,000 shares. The offering will also be made available to eligible senior executives of Lulu Group as part of the Senior Executives Offering.
When asked whether Lulu Holdings would consider increasing investor allocation, based on demand, Lulu Retail CEO Saifee Rupawala said they had no such plans at this time.
Emirates NBD Capital, HSBC Holdings, Abu Dhabi Commercial Bank and Citigroup are joint bookrunners, with Moelis & Co. retained as Financial Advisors.
The LuLu issue is expected to be the fourth IPO in Abu Dhabi this year, following NMDC Energy, which raised $877 million, Alef Education Holding Plc. which raised $515 million, and ADNH Catering, which is set to list its shares on ADX on 23 October.
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