Pharma IPO set to be Saudi’s largest listing this year

Creative Commons/US Public Health Image Library

• SAR60 final offer price implies an SAR4.2bn ($1.12bn) market cap
• 30% of issued share capital owned by existing investors will be offered
• Kingdom hopes to see at least 24 IPOs this year

Saudi’s Jamjoom Pharmaceuticals looks set to raise SAR1.26 billion ($336 million) when it lists later this year, putting it on course to become the kingdom’s biggest IPO in 2023.  

The manufacturer’s final offer price has been set at SAR60 per share. It was at the top of a range that started at SAR56, implying a market capitalisation of SAR4.2 billion ($1.12 billion) at listing.

The company will offer 21 million shares, or 30 percent of its issued share capital, by selling existing shareholders’ shares.

• Saudi’s First Milling sets price range for IPO  
• Tadawul and DFM are overvalued, data shows
• Saudi Tadawul profit down 35% as trading values halve

Jamjoom Pharma will take orders from retail investors from May 30 to June 1, while a listing date will be determined later.

The company has secured two cornerstone investors for its IPO. Saudi Economic and Development Holding Company (Sedco) and Al Faisaliah Group Holding Company represent 24.6 percent of the shares on offer.

The oversubscription rate was 67.2 times, or 88.8 times, excluding the shares that were allocated to cornerstone investors, indicating strong demand.

It is the highest such rate since Saudi Aramco Base Oil Co., a refining unit of the state-owned oil producer, raised $1.32 billion in its listing in December.

To date, just $72 million had been raised through Saudi IPOs in the slowest start since 2014, data compiled by Bloomberg showed. It is a fraction of the almost $4 billion seen this time last year.

First-quarter trading activity fell 50 percent year-on-year in Saudi Arabia. That compared to 36 percent in Kuwait, 15 percent in Dubai and 40 percent in Qatar, according to financial services firm EFG Hermes.

However, it is hoped that a renewed appetite for listings will help revive the market.

On 19 May, First Milling, the first mill to be privatised in the kingdom, set the price range for its IPO at SAR55 to SAR60 per share. This implied a market cap of between SAR3.05 billion and SAR3.3 billion.

Saudi hopes to list more than 24 companies on its stock exchange this year, the kingdom’s regulator, the Capital Market Authority, said in its annual report, released earlier this week.

The kingdom also plans to increase foreign investments in its Tadawul exchange. By the end of 2023, it wants foreign owned shares to make up 16.5 percent of the total by value.

The regulator also wants the market’s assets under management to be equivalent to 27.4 percent of gross domestic product by 31 December.