Retail Lulu aims to raise $1.4bn from Abu Dhabi IPO listing By Chris Hamill-Stewart October 28, 2024, 3:27 PM Jeffrey Isaac Greenberg/Alamy via Reuters Connect Lulu operates 116 hypermarkets, 102 express stores and 22 mini markets in the GCC Predicted price about AED1.94 Subscription closes November 5 Price ‘in line with competitors’ Lulu Retail Holdings, the largest grocery retailer in the GCC, has announced a price range of between AED1.94 and AED2.04 per share for its much-anticipated IPO on the Abu Dhabi Stock Exchange (ADX). If all the 2.8 billion shares offered, a quarter of the total holding, are sold, the size of the offering will be between AED5 billion ($1.36 billion) and AED5.27 billion. The subscription period began today and is expected to close on Tuesday November 5. The final offer price is expected to be determined on November 6. Lulu, which is currently 100 percent owned by Lulu International Holdings Ltd, operates 116 hypermarkets, 102 express stores and 22 mini markets in the GCC, with 103 stores in the UAE, 56 in Saudi Arabia and 81 stores in Kuwait, Oman, Bahrain and Qatar. Supermarket major Lulu officially announces IPO Lulu shrugs off rivals’ stock performance ahead of IPO Late-year flurry of flotations forecast for Gulf The company, which was founded 50 years ago, is the second largest grocery retailer in the UAE, and the largest retailer in Oman, Qatar, Bahrain and Kuwait. It claims a 13.5 percent share of the GCC offline grocery market. Revenue for the six months ended June 30, 2024 rose by $203.5 million, or 5.6 percent, to $3.9 billion, from $3.7 billion for the six months ended June 30, 2023. Ebitda for the six months ended June 30, 2024 increased by 4.2 percent, to $391 million, from $375 million for the six months ended June 30, 2023. Saifee Rupawala, Lulu Retail’s CEO, said: “We expect continued strong macroeconomic growth across our six markets, driven by favourable demographic and consumption trends, and we continue to invest in our business to drive growth and loyalty across our existing 240-store network while also opening new stores, enhancing our operational efficiencies, growing our private label range and our online and ecommerce business. “We remain confident we will achieve our guidance targets in 2024 and beyond, and the offer price range reflects our desire to prioritise a supportive aftermarket performance post-listing and to welcome all investors to join in Lulu Retail’s exciting next chapter.” The market analysis company Sico Research in Riyadh said the share price being set by Lulu Retail for its IPO was broadly in line with its competitors. Sico Research said: “At the current price range, Lulu is expected to trade at an FY24 P/E of 23-25x, in line with its closest regional peer, Othaim, which trades at an FY24 P/E of 24.4. “We conservatively estimate earnings to grow to $230 million to $240 million in FY24, and $250 million to $260 million in FY25, factoring in management’s guidance of 8 to 10 percent growth in revenues and a consistent 3 percent net profit margin. “Upside potential could arise from margin expansion, cost controls, or greater revenue growth than we have pencilled into our estimate.”