TLDR:
• Lulu IPO raises record AED 6.32 billion
• Oversubscribed by 25 times, high demand
• Major milestone with ADX listing
ABU DHABI (The Thursday Times) — Lulu Retail Holdings has marked a historic moment in the UAE financial landscape with the successful completion of its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX). Priced at AED 2.04 per share, the top end of its range, the offering brought in AED 6.32 billion ($1.72 billion), the largest UAE IPO of 2024. The IPO’s staggering demand reached AED 135 billion ($37 billion), breaking records and signalling robust interest from both local and international investors. With more than 82,000 retail investors participating, Lulu’s IPO is also notable for setting a record in UAE retail investor engagement, reflecting strong confidence in the company’s regional market position and strategic growth plans.
The IPO, initially set at 25% of Lulu’s shares, saw an increased offering to 30% of its total shareholding, drawing particular interest from cornerstone investors such as the Abu Dhabi Pension Fund and Mumtalakat Holding Company from Bahrain, among others. Saudi Arabia’s Masarrah Investment Company, a prominent cornerstone investor, committed AED 250 million, further underscoring regional support for Lulu’s market expansion. The additional shares were wholly allocated to the Qualified Investor Offering, reserved for professional investors, reflecting Lulu’s intent to attract a diverse range of sophisticated shareholders.
Exceptional demand highlights confidence in Lulu’s growth strategy
The extraordinary demand for Lulu’s IPO, oversubscribed by over 25 times, represents a strong endorsement of the company’s regional strategy and consumer appeal. As a retail powerhouse operating across the GCC, Egypt, India, and the Far East, Lulu has developed a significant presence through its extensive supermarket and hypermarket chains, catering to a diverse customer base. CEO Saifee Rupawala attributed the IPO’s success to Lulu’s commitment to customer experience, strategic market positioning, and resilient financial performance, which have combined to create a formidable growth trajectory. Rupawala’s assurance of a 75% dividend payout from annual profits post-tax further solidifies Lulu’s reputation as a company dedicated to rewarding shareholder trust.
Increased offering attracts regional and international interest
Lulu’s decision to increase the IPO offering by 5% underscores the strong investor appetite and marks a significant milestone for the UAE’s private sector. The offering drew substantial attention from regional and international investors, including high-profile entities across the GCC. The retail giant’s commitment to expanding its footprint has resonated with investors, who see Lulu as an integral part of the UAE’s vision for economic diversification and retail growth. The IPO’s reception, with extensive participation from retail investors, highlights Lulu’s appeal as a diversified retail leader with significant growth potential.
ADX listing poised to elevate Lulu’s market presence
The forthcoming listing of Lulu Retail’s shares on ADX on November 14, 2024, will mark a major milestone for the Abu Dhabi exchange, marking its 100th listing and reinforcing its position as a competitive hub for public offerings in the Middle East. Lulu’s market capitalisation, projected at AED 21.1 billion, will contribute to ADX’s rising stature as a significant platform for prominent regional IPOs. Joint bookrunners and financial advisors for the IPO, including Emirates NBD Capital, HSBC, Abu Dhabi Commercial Bank, and Citigroup, coordinated the successful offering, further reinforcing ADX’s reputation as a primary exchange for high-profile listings.
For the UAE retail sector, Lulu’s IPO signifies a progressive step in encouraging regional companies to go public, fostering transparency, and building investor confidence. The unprecedented retail investor participation and landmark status of the IPO are reflective of Lulu’s commitment to broadening its market reach while contributing to the growth of the UAE’s dynamic economic ecosystem.
