The latest IPO in Saudi Arabia’s booming market sees Arabian Mills for Food Products Co. sell out its offering in just one hour, signaling strong investor appetite and a robust outlook for the kingdom’s equity capital markets.
In a stunning display of investor enthusiasm, Arabian Mills for Food Products Co., one of Saudi Arabia’s leading flour milling companies, saw its initial public offering (IPO) fully subscribed within a mere hour of opening. The company aims to raise an impressive $271 million by offering a 30% stake, comprising approximately 15.4 million shares on the Saudi stock exchange.
The IPO’s price range was set between 62 to 66 Saudi riyals ($16.50 to $17.60) per share, with institutional investors eagerly covering the entire order book across this range. This rapid sellout underscores the robust appetite for new listings in the Saudi market and hints at a potentially vibrant final quarter for IPOs in the kingdom.
Arabian Mills’ offering is part of a larger trend in Saudi Arabia’s privatization efforts. It marks the fourth flour milling company to go public following the government’s strategic decision to split the state-controlled industry into four separate entities and transition them to the private sector. This move aligns with Saudi Arabia’s broader economic diversification plans outlined in Vision 2030.
The success of Arabian Mills’ IPO follows a string of well-received offerings in the Saudi market. Notable recent examples include the $12 billion secondary offering from oil giant Saudi Aramco and the $763 million IPO of Dr. Soliman Abdul Kader Fakeeh Hospital, both of which saw their books covered within hours.
Industry experts view this trend as a positive indicator for Saudi Arabia’s equity capital markets, suggesting continued vibrancy through 2024. The kingdom’s IPO market has remained active despite global economic uncertainties, attracting both domestic and international investors.
As Arabian Mills prepares for its trading debut, all eyes will be on its performance, which could set the tone for future offerings in the Saudi market. With the retail subscription period set for mid-September, individual investors are poised to join the excitement, further cementing the IPO’s success story.
