Ali Alghanim revs up ahead of IPO in Kuwait

Ali Alghanim

• Ali Alghanim & Sons to begin trading on Boursa Kuwait on Tuesday
• $323m private placement by EFG Hermes oversubscribed 11 times
• First IPO on Kuwait market since 2020 and EFG Hermes’ first in Kuwait

EFG Hermes has completed the $323 million private placement on Ali Alghanim & Sons ahead of the auto giant’s initial public offering in Kuwait. 

The private placement was oversubscribed approximately 11 times, with a total demand of around $3 billion. The stock will begin trading on Boursa Kuwait on Tuesday.

Ali Alghanim & Sons Automotive Company offers some of the world’s most luxurious car brands, with distribution spanning Kuwait, Egypt, and Iraq.

The company listed 124.8 million shares on Monday — representing 45 percent of its share capital — at a price of 793 Kuwaiti fils per share, implying a market capitalisation of $717 million and marking the first IPO in the Kuwaiti stock market since 2020. 

The listing is also EFG Hermes’ first in Kuwait. Mohamed Abou Samra, managing director of the Egyptian firm’s investment banking division, described this as “proof positive of the traction we’ve built in the GCC and underscores our ability to bridge the gap between global capital and compelling local opportunities even amid challenging market conditions”.

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He added: “The GCC has seen fresh listings recently as countries in the region work to deepen their capital market under the umbrella of wider-scope economic reform plans. Kuwait in particular is expected to see renewed interest in the market, as evidenced by the solid demand from a multitude of local, regional, and global investors on the listing of Ali Alghanim & Sons Automotive.

“We expect to continue to capitalize on this uptick in activity, having already lined up several [equity capital market] transactions in the region in the year ahead.”

Companies in the GCC have raised over $22 billion in primary and secondary offers in the past 12 months. Kuwait’s arrival in the key emerging market indices in 2019-20 means it is now on the radar of fund managers investing hundreds of billions of dollars. 

Last year, EFG Hermes’ investment banking team completed cross-border transactions including UAE-based Agthia Group’s acquisition of Kuwait’s Al Faysal Bakery and Sweets. EFG Hermes’ investment banking team recently advised on Borouge’s $2 billion IPO and the DEWA IPO, which has a value of $6.1 billion.