Mena witnesses 48 IPOs raising $10.7 billion in 2023

A total of 29 companies in the Middle East and North Africa (Mena) region are expected to list this year, with Saudi Arabia and the UAE leading the way in terms of expected volumes, a report showed.

According to the EY Mena IPO Eye Q4 2023 report, Mena markets saw 48 initial public offerings (IPOs) in 2023, raising $10.7 billion in total. Five listings, mainly in the energy and logistics sectors, contributed 58 per cent towards the total IPO proceeds raised.

During Q4 2023, 19 IPOs raised $4.9 billion in proceeds. ADES Holding Company raised the most funds and contributed 25 per cent of the overall IPO proceeds in the last quarter, followed by Pure Health Holding PJSC with 20 per cent. All Q4 listing activity took place in the GCC region, with Egypt being the only non-GCC country that reported IPOs throughout 2023.

Investor confidence in the region continues, with 11 out of the 19 Q4 2023 IPOs recording a first-day gain in share price. At the end of 2023, 26 out of the 48 IPOs showed a positive return compared to their listing price, with Armah Sports Company achieving the highest gain at 72 per cent, the report showed.

Last year recorded a six per cent decrease in the number of IPOs and a 51 per cent drop in proceeds, compared to 2022. Notably, 2022 witnessed a significant number of IPOs, such as Americana Restaurants International PLC (Americana), Saudi Aramco Base Oil Company (Luberef) and Arabian Drilling Company, which played a role in the decline seen in 2023.

Brad Watson, EY Mena strategy and transactions leader, says: “In 2023, there were a total of 48 IPOs raising $10.7b, of which five listed companies contributed 58 per cent toward the total IPO proceeds raised, mainly in the energy and logistics sectors. Investor confidence in the region continues with 11 out of the 19 Q4 2023 IPOs recording a first day gain in share price. The 2024 pipeline includes 29 companies across various sectors, announcing their intention to list with the Saudi Arabia and the UAE leading the way in terms of expected volumes.”

Saudi Arabia continues to dominate listings

Once again, Saudi Arabia reaffirmed its dominance in terms of IPO activity in the region with 14 of the 19 listings in Q4 2023. ADES Holding Company marked the highest proceeds at $1.2 billion, followed by SAL Saudi Logistics Services Company at $700 million. Both IPOs were listed on the Tadawul Main Market. The remaining 12 IPOs, raising $140 million in total, took place on the Nomu – parallel market, which also witnessed the quarter’s only direct listing in the Mena region – Almujtama Alraida Medical Co.

In 2023, the country’s IPOs came from a variety of sectors, led by energy (36 per cent), transportation (29 per cent) and healthcare (10 per cent).

Q1 2024 kicked off with two Saudi listings on Tadawul in January – MBC Group, raising $222m, and Avalon Pharma, raising $437m.

In Q4 2023, the UAE hosted the 28th UN Climate Change Conference (COP28). During the global climate event, DFM introduced a pilot platform to trade carbon credits that will allow companies to manage their residual and unavoidable carbon emissions, supporting their pursuit of decarbonisation and net-zero targets. In addition, ADX launched the FTSE Russell ESG Screened Index in time for COP28. The index provides investors with a transparent and tradable environmental, social and corporate governance (ESG) benchmark that ranks companies based on their ESG scores, promoting sustainable business practices among ADX-listed companies.