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First Avenue priced its IPO on parallel market Nomu at SAR 6 per share, after the offering was 7.4x oversubscribed, according to a disclosure to Tadawul by the offering’s financial advisor and lead manager Al Khair Capital. The Riyadh-based real estate developer is offering an 8.7% stake (equivalent to 16.4 mn shares) on the Nomu parallel market. 819 investors put in requests for shares, the disclosure said.
Market cap + proceeds: The offer’s pricing at SAR 6 per share sees the company raising SAR 98.5 mn in proceeds and gives it a market cap of SAR 1.1 bn at listing.
Use of proceeds: After deducting SAR 3.5 mn in listing fees, all remaining net proceeds will go toward expansion projects — represented by two real estate investments at Jada Al Diriyah and Jada Al Mahamdiyah — with no funds allocated to shareholders or debt repayment. If proceeds are insufficient to finance the projects, the shortfall will be covered by available liquidity, real estate sales, or financing through banks. Meanwhile, any surplus proceeds will support the projects’ working capital.
What’s next? Share allocations should have wrapped up yesterday with refunds set to be processed within the next two days. A 12-month lock-up period applies to major shareholders; after the lock-up ends, they can sell without prior approval.
Background: Makkah Construction and Development Co. (MCDC) signed a share purchaseagreement to acquire a 30% stake in First Avenue Real Estate Development for SAR 341 mn, late last month. The acquisition was to be financed through MCDC’s own resources and existing facilities, with the agreement outlining a commitment from First Avenue to fulfill the requirements and acquire necessary approvals for it to debut on Nomu.
ADVISORS- Al Khair Capital is acting as both financial advisor and subscription manager, while Khalijoon Law Firm is providing counsel. RSM United Accountants is auditing the company's financials. Meanwhile Al Rajhi Capital, AlBilad Capital, Riyad Capital, SNB Capital, and other institutions are acting as receiving agents.
