Saudi Arabian auto rental firm Lumi jumps 30% in Riyadh IPO

Company raises $290 million in share sale

By Reuters

Published: Mon 25 Sep 2023, 10:12 PM

Shares in Saudi Arabia's Lumi jumped as much as 30% above their listing price on Monday after the auto rental company raised $290 million in an initial public offering.

Lumi, which listed 30% of its shares in the IPO, is a unit of Saudi travel company Seera (1810.SE), which was formerly known as Al Tayyar Travel Group.

Lumi's shares rose as high as 85.8 riyals ($22.87) in early trade on the Riyadh bourse, after opening at 72.6 riyals. Its IPO price of 66 riyals was at the top of its indicative range.

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The auto rental company's IPO prospectus said it ranked as the third-biggest operator in the country, with a market share of about 7%, based on its fleet size in 2021.

The Saudi car rental market is expected to grow at a compound annual growth rate of 8.6% up to 2027, to reach a market size of 9.8 billion riyals, according to research from Glasgow Research & Consulting.

Lumi's listing comes as IPO activity in the Gulf is starting to pick up after a slow start to 2023, as Dubai's privatisation programme went quiet and Saudi Arabia had a slow start.

Issuers from the Middle East and North Africa raised more than $5 billion in the first half of this year, consultancy EY said in a report earlier this month, with the bulk coming from Saudi Arabia and the United Arab Emirates.

This was 60% lower compared with the first half of 2022, which was an exceptionally strong year for the Gulf IPO market.