Fintech outfit Rasan plans to sell a 30% stake on Tadawul’s main market through an offering of existing and new shares, it said in a prospectus (pdf). It lined up Capital Market Authority approval for the share sale in March.

What’s on offer: Rasan is looking to sell 22.7 mn shares, including 17.4 mn shares from 15 selling shareholders and 5.3 mn news shares, according to the prospectus.

What’s Rasan? Established in 2016, Rasan is a fintech firm focused on ins. and banking across the Gulf serving both retail customers and businesses. Its digital solutions include Tameeni Motor, Tameeni Health, Treza, Awal Mazad, R Solutions, a data analysis product. It has offices in Saudi, the UAE, and Egypt. Tameeni is the “first and largest ins. aggregator in KSA,” the company’s intention to float (pdf) says.

The pitch: Rasan is a first mover in an industry with plenty of room to grow thanks to the under-penetration of the industry and ins. industry targets in Vision 2030. Per the ITD: “Ins. penetration in the Kingdom, defined as gross written premiums as % of GDP, stood at 1.3% in 2022, considerably lower relative to regional markets (UAE: 2.5%, Bahrain: 1.7%) and even lower compared to the global average of 6.6%.”

By the numbers: Rasan has served 7.5 mn customers since it launched. Its flagship Tameeni Motor product has a 47% share of gross written premiums, ahead of all other insurers, brokers, and aggregators. Tameeni Health, launched in 2020, has a 5% share. It has partnerships with 24 insurers and a range of banks and leasing companies.

The IPO timeline: Bankers will take orders from institutional investors from Sunday, 12 May to Thursday, 16 May, while the bookbuilding process for retail investors will run on Wednesday and Thursday, 29-30 May. The results of the bookbuilding process will be announced on Tuesday, 4 June. The first day of trading remains contingent on fulfilling regulatory requirements, according to the prospectus.

Use of proceeds: Rasan plans to use the proceeds — after deducting SAR 40.4 mn to cover offering expenses — to “expand the group’s current operations and products, market and develop the group’s new products, and finance the general purposes of the Group.” A portion of the net proceeds will be distributed to selling shareholders relative to the size of the stakes they sell.

Post-IPO ownership structure: Rasan’s substantial shareholders are Impact Funds for Financial Technology Company, Theib Hudeiban Ghallab AlMutairi, Muheideb Ali Mohammed AlMuheideb, Samer Mohammed Raslan, Mohammed Muheideb Ali AlMuheideb, and Assets Custody Development Impact Company for Communications and Information. The share sale will see them sell down their positions to hold a collective 47.3% stake, down from 67.5% before the transaction.

Lockup period: Substantial shareholders will not be able to execute any transactions on their shares for a period of six months starting from the first day of trading.

How the financials are looking: Rasan’s most recent financials show the company bringing in SAR 36.0 mn in net income in 9M 2023 on SAR 186.4 mn in revenues. The company reported selling 3.2 mn policies during the nine-month period, up 29% y-o-y. Rasan’s revenue expanded at a CAGR of 81% in the period 2020-2023.

Need more? The company’s IPO microsite is here.

ADVISORS- Saudi Fransi Capital is quarterbacking the transaction as financial advisor, lead manager, bookrunner and underwriter. Morgan Stanley Saudi Arabia is also acting as financial advisor, bookrunner, and underwriter. Latham & Watkins is Rasan’s legal advisor, while White & Case was appointed as legal advisor to the lead manager, financial advisors, underwriters, and bookrunners. Receiving banks include Banque Saudi Fransi and AlRajhi Bank. PwC is financial due diligence advisor and marketing consultant and EY is serving as auditor.

REMEMBER- Listings in Saudi are picking up steam, with Fakeeh Care gearing for what could be the largest share sale in the Kingdom so far this year. Bankers wrapped up on Thursday the institutional tranche of water treatment company Miahona’s IPO. Saudi Manpower Solutions (Smasco) is also gearing to take a 30% stake to the main market, with bankers taking orders from institutional investors starting Wednesday, 8 May. Companies have so far raised USD 697 mn through IPOs this year, with the largest current IPO being Modern Mills which listed in March.

IPO PIPELINE AT A GLANCE-

Also in the pipeline right now:

  • Miahona could raise as much as SAR 555 mn from its listing;
  • Budget airline Flynas is reportedly looking to go public this year;
  • PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
  • Labor agency Smasco is selling a 30% stake;
  • Hotels and resorts operator Boudl has filed to go public;
  • Fourth Milling Company will list before the end of June;
  • Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
  • Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX;
  • Aster DM Healthcare looks set to spin-off its GCC assets and seek a dual listing on Tadawul and in the UAE.
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