Car rental company Cherry Trading closed down 5.7% at SAR 26.40 on its Tadawul debut yesterday, playing into a pattern of muted first-day performance on the main market amid broader liquidity pressures. The stock traded between a low of SAR 25.9 and a high of SAR 29.0, with 9.24 mn shares changing hands across 23.7k trades worth SAR 257.6 mn.

The downbeat debut stands in contrast to the strong demand during the offering phase, where the retail tranche closed 6.5x oversubscribed and the institutional bookbuild drew 85.6x coverage, prompting the company to price at SAR 28 a share. Cherry floated a 30% stake, 9 mn shares, in a combined primary and secondary sale.

Usual caps apply: Cherry’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.

IN CONTEXT- This is the smallest IPO on the main market so far this year: Cherry’s SAR 252 mn raise sits at the very bottom of the 2025 proceeds table, coming in just below Sport Clubs Company (SAR 257 mn) and well behind mid-tier floats such as Marketing Home Group (SAR 408 mn) and Entaj (SAR 450 mn).

Looking ahead, EFG Hermes noted that the company’s post-listing performance will depend on fleet-utilization efficiency, the adoption of digitized fleet-management solutions, and the robustness of its governance practices, as well as overall liquidity conditions, according to a press release (pdf).

ADVISORS- – Our friends at EFG Hermes KSA, along with BSF Capital, acted as financial advisors, bookrunners and underwriters. Receiving agents included Alinma Investment, Al Rajhi Capital, SNB Capital, Riyad Capital, Al Bilad Investment, Al Jazira Capital, Alistithmar Capital, Derayah Financial, ANB Capital, Yaqeen Capital, Al Khabeer Capital, Sab Invest, Saham Capital, GIB Capital, Musharaka Capital and Awaed Alosool Capital.

Tags: