Sport Clubs IPO defies Tadawul drag on first day

Sport Clubs Company’s stock jumped 24% to close at SAR 9.3 apiece on its debut yesterday, bucking a wider trend of slumping Tadawul IPOs. More than 63.4 mn shares changed hands during the day, generating a total turnover of SAR 548.5 mn.

ICYMI: The Riyadh-based fitness firm floated a 30% stake in a hybrid offering, which saw its retail tranche 5.3x oversubscribed and its institutional tranche 44.1x oversubscribed. The company raked in SAR 257.3 mn in proceeds, set to fund expansion and upgrades.

What’s next: The gym operator’s shares will be allowed to fluctuate within a 30% range, with a static band of 10% for the first three trading days. Starting from the fourth day, shares will be allowed to trade at a 10% volatility as circuit breakers kick in.

Ending the dry spell? Tadawul’s last three main market listings — namely Specialized MedicalCompany, Flynas and United Carton Industries — all saw muted debuts despite a solid order book, amid broader market jitters and concerns over frosty valuations. All three are still trading below IPO levels as of yesterday’s close.

The main market struggled in the first half. TASI closed 1H in the red, shedding 7.2% in the first six months of the year and bucking a positive trend seen in some of the most relevant regional peers like Abu Dhabi’s ADX and Dubai’s DFM. The sharp fall was driven by regional geopolitical tensions, oil price fluctuations, and declining investor appetite for small- and medium-sized enterprise stocks.

ADVISORS- BSF Capital is quarterbacking the transaction as lead manager, financial advisor, bookrunner, and underwriter. Kirkland & Ellis International is providing counsel. PwC is serving as financial due diligence advisor, Dr. Mohamed Al-Amri & Co. Chartered Accountants as auditor, and Portas Consulting MEA as market consultant.

ALSO IN THE PIPELINE-

• Dar AlMajed and Marketing Home Group are the latest to move beyond receiving the CMA’s approval;
• Meanwhile, IT firm Ejada Systems, which missed its six-month IPO window, is set to resubmit an IPO application to the CMA;
• Coldchain manufacturer Consolidated Grunenfelder Saady Holding got the regulators’ all-clear to float a 30% stake on Tadawul;
• PIF-backed Saudi Global Ports, Tabreed District Cooling, Medical procurement firm Nupco, Riyad Capital, and BNPL platform Tabby are among companies that tapped banks for potential IPOs;
• F&B players Barns, Half Million, Deemah, and Hashi Bashi are said to be sounding out banks for potential debuts on the main market;
• Almosafer is preparing for a public listing on Tadawul by late 2025 or early 2026;
• PIF-backed CloudKitchens is reportedly eyeing an IPO in the Kingdom or the UAE (or both);
• Meal subscription startup Calo is also said to be eyeing an IPO here at home by 2027.