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Mena witnesses 48 IPOs raising $10.7 billion in 2023

Saudi Arabia continued to dominate listings with 14 IPOs and one direct listing in Q4 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.

Gregory Hughes, EY Mena IPO and transaction diligence leader, says: “The Mena IPO market delivered a healthy number of IPOs across various sectors in 2023, despite the subdued global economic backdrop and the rising geopolitical tensions in the Middle East. A number of reputable large state-owned companies listed in 2023, including the Dubai Taxi Co and OQ Gas Networks. As expected, 2024 started off positively with the MBC listing, Avalon Pharma and the announcements of several IPOs on the Mena markets including large private and state-owned names.”

UAE reports four new listings

Abu Dhabi Securities Exchange (ADX) welcomed three IPOs in Q4 2023, raising a combined total of $1.8 billion. These included Pure Health Holding PJSC, valued at $987 million, Investcorp Capital plc at $451 million and Phoenix Group PLC at $371 million. Pure Health Holding PJSC reported the highest first-day gain of 76 per cent. In addition, there was one new listing in the transportation sector on the Dubai Financial Market (DFM) – Dubai Taxi Company PJSC, worth $315 million.

Oman records its largest IPO to date

The Muscat Stock Exchange (MSX) saw the largest IPO in Oman to date with OQ Gas Networks SAOC raising $772 million. Meanwhile, Oman Investment Authority (OIA), the country’s sovereign wealth fund, is preparing to launch multiple IPOs and list state assets to strengthen its capital markets.

Sustainability focus gets new boost with COP28

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.