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Saudi Arabia’s Riyad Capital explores $2.5bn IPO 

Riyad Bank tower in the King Abdullah Financial District of the Saudi capital. The bank is already listed on the Tadawul Alamy
Riyad Bank tower in the King Abdullah Financial District of the Saudi capital. The bank is already listed on the Tadawul
  • Investment division of Riyad Bank
  • Working with JP Morgan Chase
  • Other Saudi banks may follow

The proposed listing of Riyad Capital, the investment banking arm of Riyad Bank, would value the business at $2.5 billion, Bloomberg has reported.

Riyad Capital is working with JP Morgan Chase & Co on the plan to list on the Saudi stock exchange, which is expected in mid-2025.

Founded in 2008, Riyad Capital offers a suite of investment and brokerage services. If the initial public offering (IPO) goes ahead, a $2.5 billion valuation would be “quite favourable”, said analyst Sico Research.

According to Sico’s calculations of Riyad Capital’s 2024 earnings, $2.5 billion would be 21 times the company’s earnings per share – higher than the 15 times EPS usually expected in IPOs.

“Our analysis is based on various assumptions at this stage, but the valuation appears to be quite favourable if confirmed. A successful spin-off of Riyad Capital may also trigger other major Saudi banks following suit and listing their investment services/asset management entities,” Sico said.

Companies raised just over $4 billion through new share sales in Saudi Arabia last year.

Since the start of 2024, there have been 14 IPOs in Saudi Arabia that raised more than $100 million, according to data compiled by AGBI and London Stock Exchange Group. Eleven of these companies were trading above their IPO price as of market close on January 12.

Five more IPOs are have been approved for the Saudi exchange. They include Derayah Financial, which is reportedly planning a $2 billion listing, technology company Ejada Systems and property developer Umm Al Qura Development & Construction.

Another 30 companies are waiting for regulatory approval to list on the Tadawul.