SVG Hover Effect

SVG Hover Effect

Lulu’s ADX IPO targets around $5bn bolstered by keystone GCC investors

Lulu Group’s ADX IPO promises to raise billions, anchored by cornerstone investor backing and an ambitious dividend plan to fuel its expansion across UAE markets.

TLDR:

• Lulu sets IPO price range

• AED 753 million cornerstone backing

• Listing date 14 November


ABU DHABI (The Thursday Times) — UAE’s retail powerhouse Lulu Group is gearing up for a major debut on the Abu Dhabi Securities Exchange (ADX), aiming to raise between AED 5.01 billion and AED 5.27 billion. The company has announced a price range for its shares, inviting investors to purchase at AED 1.94 to AED 2.04 per share. With the IPO, Lulu seeks a valuation between AED 20.04 billion and AED 21.07 billion, with a book-building process determining the final offer price on 6 November.

Offer price range and market potential

Lulu’s IPO opens a significant opportunity for local and professional investors alike, marking a substantial valuation for the UAE retail sector. With an offer price range of AED 1.94 to AED 2.04 per share, Lulu targets a sizable capital injection to strengthen its expansion across the UAE. The book-building process will guide the final price, drawing on demand dynamics from the subscription period, which closes on 5 November.

Targeted investors and subscription timeline

Structured to attract a broad range of investors, the IPO targets UAE retail participants, senior executives, and qualified investors. The commitment from cornerstone investors is pivotal; the Abu Dhabi Pension Fund, Bahrain’s Mumtalakat, the Oman Investment Authority, and Emirates International Investment Company (EIIC) have agreed to anchor the offering. EIIC’s pledge of $100 million represents a notable stake, subject to a 180-day lock-up, reflecting the long-term commitment from these entities.

Share structure and dividend strategy

Lulu Group’s IPO will see 2.58 billion shares, or 25% of the company’s share capital, listed across a three-tranche structure. Aiming to reward shareholders, the group plans a dividend payout ratio of 75% of its annual post-tax distributable profits, with payments made twice a year. The first dividend, covering the last half of 2024, is slated for early 2025, underscoring Lulu’s focus on consistent shareholder returns.

Key financial advisors and joint bookrunners

Lulu has enlisted leading financial institutions to support its IPO. Emirates NBD Capital, HSBC, Abu Dhabi Commercial Bank (ADCB), and Citigroup are named as joint bookrunners, with Moelis & Co. acting as a financial advisor. Additional backing comes from ADCB and First Abu Dhabi Bank (FAB) as lead receiving banks, supporting the IPO’s comprehensive structure and investor outreach.

Listing date and strategic vision for expansion

The Lulu Group is expected to list on ADX on 14 November, marking a new phase for the UAE retail giant. The funds raised will enable Lulu to bolster its market position while scaling its operational footprint, supporting the UAE’s dynamic retail environment through heightened investor engagement and strategic expansion into new markets.

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