Saudi Arabia's initial public offering (IPO) market is witnessing a resurgence, underlined by the unprecedented success of SAL Saudi Logistics Services Co.'s recent IPO. The company managed to accumulate orders worth $48.6 billion for its $678 million IPO, making it the second-largest this year, despite the early-year stagnation of the Saudi IPO market.
Institutional investors showed robust interest in SAL's IPO, bidding for 72 times the available shares. This strong demand demonstrates a renewed vigor in Saudi Arabia's IPO market, following a period of relative stagnation earlier this year.
SAL's IPO followed oil driller ADES Holding Co.'s $1.2 billion offering and saw high investor demand. The logistics firm, which holds a 95% market share, is central to Saudi Arabia's goal of becoming a global supply chain hub, especially amid fluctuating crude oil prices.
The company is valued at 8.48 billion riyals with shares priced at 106 riyals each. Saudi Arabian Airlines Corp. and Tarabot Air Cargo Services Ltd. are offering a 30% stake in the IPO.
HSBC Holdings (NYSE:HSBC) Plc’s Saudi unit manages the IPO, with retail investors having placed orders from Tuesday to Thursday last week.
The significant interest in SAL's IPO underscores the recovery and potential growth of Saudi Arabia's IPO market, signaling an optimistic outlook for future offerings.
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