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Lulu Group targets Iraq and Africa ahead of Abu Dhabi IPO

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Lulu Group was founded in 2000 by Yusuffali, centre
  • Supermarket has 239 stores in 23 countries and 60,000 employees
  • Listing on Abu Dhabi Securities Exchange planned for next year

Lulu Group International is planning a listing on the Abu Dhabi Securities Exchange in 2023 and has hired investment bank Moelis & Co to advise it.

The supermarket chain, which has its headquarters in Abu Dhabi, also confirmed to AGBI that it will add new outlets to its network as it consolidates in the Middle East and moves into new markets, including Iraq and North Africa.

Lulu Group was founded by Indian-born businessman Yusuffali and is one of the largest supermarket chains in the Gulf region. It operates 239 stores in 23 countries and employs more than 60,000 people.

V. Nandakumar, Lulu Group’s director of marketing & communications, said they are “confident about listing” as current market sentiment is strong. 

The Abu Dhabi Securities Exchange’s (ADX) market capitalisation opened above AED2 trillion ($545 billion) in June for the first time in its history, marking a landmark milestone that has made the region’s youngest exchange the second largest in the Middle East within only two decades.

According to the Arab Monetary Fund (AMF), the UAE capital’s bourse recorded the highest increase in trading value among Arab financial markets in May 2022 at 292.64 percent.

The rise in ADX’s market cap is attributed to a flurry of IPOs in the last few quarters, including Abu Dhabi Ports, Fertiglobe, Adnoc Drilling, Alpha Dhabi and Multiply Group.

IPOs of five Abu Dhabi government-controlled companies – ADNOC Drilling Co, urea and ammonia maker Fertiglobe, Al Yah Satellite Communication Co (Yahsat), Abu Dhabi Ports and petrochemicals manufacturer Borouge – raised a combined $5.73 billion.

The exchange’s market cap crossed the AED2 trillion mark following the completion of Borouge’s IPO, the largest-ever listing on ADX and the biggest for a petrochemical company in the Middle East.

Earlier this week, healthcare major Burjeel Holdings raised more than $300 million from its IPO on the ADX. 

Burjeel, which offered 11 percent of its share capital, attracted demand of more than $8.7 billion as the Middle East continues to be a rare bright spot in the global IPO picture.

According to EY, the Middle East and North Africa witnessed a 500 percent year-on-year increase in the number of companies listing during the first six months of 2022, with 24 IPOs raising $13.5 billion.

Lulu Group, which also operates shopping malls and other businesses including hospitality, shipping and real estate, has an annual revenue in excess of $8 billion, and mainly operates in markets across the Middle East, Asia, Europe and the US.

Abu Dhabi sovereign wealth fund ADQ said in 2020 it was investing up to $1 billion in Lulu to help it expand in Egypt, with Reuters reporting it had bought a 20 percent stake, implying an overall valuation for the company of $5 billion.