Dar Al Majed sees hot demand for IPO

Dar Al Majed Real Estate (aka as Almajdiah) pulled in a massive SAR 135 bn in orders for its Tadawul IPO, as investors rush to grab a piece of the Kingdom’s booming property market. Institutional investors went all in, oversubscribing their tranche 107x within hours, Bloomberg reports, citing a statement.

Hot demand pushed the price up: The developer priced shares at SAR 14 apiece, the top of its range. Selling shareholders are set to rake in SAR 1.26 bn in proceeds from the sale of 90 mn shares — a 30% stake of the company. It would also give Almajdiah a market cap of SAR 4.2 bn at listing.

Next steps: Retail investors will get their turn from 14-18 August to subscribe to 20% of the offering. The company landed Sinad Holding as a cornerstone investor last week with a 2.2% stake.

IN CONTEXT- The frenzy comes as the Kingdom makes it easier for foreigners to buyproperty and pushes homeownership through its Vision 2030 program. “Local developers, especially those with a strong land bank and that have active projects in tier-1 cities, stand to benefit significantly” from the reforms, Emirates NBD Capital’s Prasad Chari told Bloomberg.

ICYMI- PIF-backed Umm Al Qura for Development and Construction took a 9.1% stake to market in a SAR 2 bn primary offering earlier this year, the second largest after Flynas. The developer’s share price is up 21% since listing.

ADVISORS- Saudi Fransi Capital is quarterbacking the transaction as financial advisor, lead manager, underwriter, and bookrunner, while Baker McKenzie is providing counsel. PwC is acting as financial due diligence advisor, while Colliers is serving as market consultant.

Receiving agents include our friends at EFG Hermes KSA, Al Rajhi Capital, SAB Invest, Alinma Capital, Riyad Capital, Aljazira Capital, Alisthimar Capital, ANB Capital, SNB Capital, Derayah Financial, Yaqeen Capital, Alkhabeer Capital, and Sahm, among others.

Zooming out: The Kingdom remained the region’s IPO powerhouse in 1H, accounting for the lion’s share with USD 2.8 bn raised across 22 offerings — a 36% y-o-y increase in value in the first six months of the year — representing 85% of total GCC IPO proceeds.

ALSO IN THE PIPELINE-

• Marketing Home Group set the indicative price range for its Tadawul IPO at SAR 80-85 per share earlier this week;
• 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.