KDL Logistics is moving forward with its IPO on Nomu — seemingly unfazed by a cold streak that saw multiple listings canceled this year.

The institutional tranche was 102% covered by qualified investors at at SAR 23 apiece, according to a bourse disclosure.

BACKGROUND- The company is taking a 20% stake to the parallel market in a secondary offering, which will see the selling shareholder rake in SAR 16.1 mn in proceeds (excluding IPO expenses).

Our take-

An oversubscribed listing, even by a tight margin, could be seen as a good sign, given the current market conditions — the Kingdom saw five Nomu IPOs cancelled this year.

Strong fundamentals in the logistics sector could enhance KDL’s chances. Total investments in the sector exceeded SAR 280 bn (USD 74.7 bn) since the sector’s national strategy launched in 2021, contributing 6.2% to the Kingdom’s GDP, Transport Minister Saleh Al Jasser said earlier this month. Global supply giants are betting on Saudi Arabia, including DHL, which recently earmarked EUR 130 mn(SAR 561 mn) for building a new Riyadh logistics hub.

BUT- The headwinds could be too strong: Nomu’s benchmark index is down over 26% YTD, and shares of logistics players lost big this year on both the main and the parallel markets. Tadawul-listed SAL Saudi Logistics Services — the most recent pure-play logistics debut before KDL — shed 32.7% since the year began, while Sadr Logistics is down 16.7% and Nomu-listed Munawala Cargo is down 44.8%.

ADVISORS- Arbah Capital is serving as financial advisor and bookrunner for the IPO, with Maham signing off as the external auditor.

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