MENA IPOs hit $10.7bn last year; Saudi leads way, Oman sets record, UAE sees 76% gain in one day

MENA markets saw 48 initial public offerings in 2023, raising $10.7bn in total.

Five listings, mainly in the energy and logistics sectors, contributed 58% towards the total IPO proceeds raised.

MENA IPOs

During Q4 2023, 19 IPOs raised $4.9bn in proceeds.

ADES Holding Company raised the most funds and contributed 25 per cent of the overall IPO proceeds in the last quarter, followed by Pure Health Holding with 20 per cent.

All Q4 listing activity took place in the GCC region, with Egypt being the only non-GCC country that reported IPOs throughout 2023.

Investor confidence in the region continues, with 11 out of the 19 Q4 2023 IPOs recording a first-day gain in share price.

At the end of 2023, 26 out of the 48 IPOs showed a positive return compared to their listing price, with Armah Sports Company achieving the highest gain at 72 per cent.

Last year recorded a 6 per cent decrease in the number of IPOs and a 51 per cent drop in proceeds, compared to 2022.

Notably, 2022 witnessed a significant number of IPOs, such as Americana Restaurants International PLC (Americana), Saudi Aramco Base Oil Company (Luberef) and Arabian Drilling Company, which played a role in the decline seen in 2023.

The 2024 pipeline includes 29 companies across various sectors announcing their intention to list, with the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) leading the way in terms of expected volumes.

Outside the GCC, Egypt has four IPOs planned.

Brad Watson, EY MENA Strategy and Transactions Leader, said: “In 2023, there were a total of 48 IPOs raising $10.7bn, of which five listed companies contributed 58 per cent toward the total IPO proceeds raised, mainly in the energy and logistics sectors.

“Investor confidence in the region continues with 11 out of the 19 Q4 2023 IPOs recording a first day gain in share price.

The 2024 pipeline includes 29 companies across various sectors, announcing their intention to list with the KSA and the UAE leading the way in terms of expected volumes.”

Once again, Saudi Arabia reaffirmed its dominance in terms of initial public offering activity in the region with 14 of the 19 listings in Q4 2023.

ADES Holding Company marked the highest proceeds at $1.2bn, followed by SAL Saudi Logistics Services Company at $700m.

Both IPOs were listed on the Tadawul Main Market. The remaining 12 initial public offerings, raising $140m in total, took place on the Nomu – Parallel Market, which also witnessed the quarter’s only direct listing in the MENA region – Almujtama Alraida Medical Co.

In 2023, the country’s initial public offerings came from a variety of sectors, led by energy (36 per cent), transportation (29 per cent) and healthcare (10 per cent).

Q1 2024 kicked off with two Saudi listings on Tadawul in January – MBC Group, raising US$222m, and Avalon Pharma, raising US$437m.

Gregory Hughes, EY MENA Initial Public Offerings and Transaction Diligence Leader, said: “The MENA IPO market delivered a healthy number of IPOs across various sectors in 2023, despite the subdued global economic backdrop and the rising geopolitical tensions in the Middle East.

“A number of reputable large state-owned companies listed in 2023, including the Dubai Taxi Co and OQ Gas Networks.

As expected, 2024 started off positively with the MBC listing, Avalon Pharma and the announcements of several IPOs on the MENA markets including large private and state-owned names.”

Abu Dhabi Securities Exchange (ADX) welcomed three initial public offerings in Q4 2023, raising a combined total of $1.8bn.

These included Pure Health Holding, valued at $987m, Investcorp Capital at $451m and Phoenix Group at $371m.

Pure Health Holding reported the highest first-day gain of 76 per cent.

In addition, there was one new listing in the transportation sector on the Dubai Financial Market (DFM) – Dubai Taxi Company PJSC, worth $315m.

The Muscat Stock Exchange (MSX) saw the largest IPO in Oman to date with OQ Gas Networks SAOC raising $772m.

Meanwhile, Oman Investment Authority (OIA), the country’s sovereign wealth fund, is preparing to launch multiple initial public offerings and list state assets to strengthen its capital markets.

In Q4 2023, the UAE hosted the 28th UN Climate Change Conference (COP28). During the global climate event, DFM introduced a pilot platform to trade carbon credits that will allow companies to manage their residual and unavoidable carbon emissions, supporting their pursuit of decarbonisation and net-zero targets.

In addition, ADX launched the FTSE Russell ESG Screened Index in time for COP28. The index provides investors with a transparent and tradable environmental, social and corporate governance (ESG) benchmark that ranks companies based on their ESG scores, promoting sustainable business practices among ADX-listed companies.