High demand leads Lulu to upsize IPO stake to 30%

Wam

Lulu Retail Holdings has increased the size of its initial public offering (IPO) by 5 percent to 30 percent to potentially raise AED6.32 billion ($1.72 billion) on the Abu Dhabi Securities Exchange (ADX) following high demand from investors.

The retail chain operator in the Middle East initially offered a 25 percent stake sale.

The total offering size will now increase to 3.1 billion from 2.6 billion shares, with the price range set between AED1.94 and AED2.04 per share.

The final offer price will be determined through a book-building process on November 6.

The additional 516.4 million shares will be fully allocated to qualified investors (tranche Two), accessible only to professional investors.

Based on the offer price range, Lulu is set to list with a market capitalisation between AED20.04 billion and AED 21.07 billion.

Saifee Rupawala, CEO of Lulu Retail, said the company’s clear strategy for growth has attracted a highly diverse investor base, leading to an increase in the total size of the IPO to cater to international, regional and local investors.

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Saudi Arabia-based Masarrah Investment Company will be a cornerstone Investor, joining the previously announced investors such as Abu Dhabi Pension Fund, Bahrain’s Mumtalakat Holding Company Company, Emirates International Investment Company and Oman Investment Authority.

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 in Kuwait, Oman, Bahrain and Qatar. 

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.