United Carton’s shares fall on Tadawul first day

May 28, 2025, 7:51 AM

UCIC, the Middle East’s largest paper packaging company, says its IPO raised $160 million

UCIC shares close 1.5% down
Prices soared for previous IPOs
Tasi has not recovered since April 2

Shares in United Carton Industries Company fell on their debut in Riyadh on Tuesday, making it the only Saudi company this year to end its first day below its initial public offering price.

UCIC closed at SAR49.25, 1.5 percent below the IPO price of SAR50, in the first Saudi listing since President Donald Trump‘s tariffs sent markets crashing.

Shares in the three companies that went public between January 1 and Trump’s announcement on April 2 all rose by 30 percent on their first day of trading, which is the maximum allowed on Saudi Arabia’s Tadawul All-Share Index (Tasi).

Muhammad Fawad Khan, equity research analyst at Alinma Capital in Riyadh, said UCIC was “in terms of growth, perhaps not as exciting as other stocks given the volatility in prices and margin”.

He added: “There are other reasons, perhaps not related to the stock, but related to the market.”

Unlike many stock exchanges around the world, Tasi has not recovered since April 2 and is now at its lowest since late 2023. Markets in the more economically diversified UAE have rebounded, with Dubai at 17-year highs.

On Sunday another Saudi company due to list in Riyadh extended its book-building exercise by two weeks. Hospital and clinic operator Specialized Medical Company (SMC) is seeking to raise up to SAR1.9 billion ($507 million).

UCIC, the Middle East’s largest paper packaging company, said its IPO had raised $160 million and was nine times oversubscribed.

Both figures are dwarfed by the $1.1 billion expected from the IPO of low-cost airline Flynas, which was reportedly 100 times oversubscribed at book-building.

“We were already expecting it [trading in UCIC] to be a bit muted compared to other IPOs,” said Shahrukh Saleem, a portfolio analyst at asset manager Mashreq Capital.

“But of course, the overall sentiment, which has turned bad, also plays a part in why this has not seen a pop.”

The Tasi is down 9.5 percent so far this year, falling below 11,000 points this week for the first time since November 9, 2023. Its largest listings – Saudi Aramco, Saudi Basic Industries, Acwa Power and Sipchem – account for about 80 percent of the decline.

The drop may be a cause for concern in what was widely expected to be a record year for Saudi IPOs. Last year 15 main-market offerings raised just over $4 billion.

Fears of a listing slowdown had been somewhat allayed following the announcements by UCIC, Flynas and SMC that they would go ahead. However, analysts have long warned that lower oil prices would take a toll on the market.

So far in 2025, Derayah Financial, Entaj, Umm al Qura and now UCIC have raised about $1.2 billion between them.

The SMC and Flynas offerings would bring the total raised by the six companies to $2.8 billion.

SMC’s initial book-building phase ended on May 15, but that close has now been pushed to May 29. Existing investors have been offered the chance to amend or cancel their bids.

When contacted by AGBI, SMC only shared its press release, which did not specify why the book-building had been extended. The retail tranche runs from June 15 to 16.

The retail tranche begins on Wednesday for the Flynas IPO, the first Gulf aviation offering in almost two decades. Prince Alwaleed’s Kingdom Holding Company is the carrier’s largest shareholder with a 37 percent stake.