Derayah Financial plans to sell 20% stake in Riyadh IPO

Derayah Financial plans to sell a 20 per cent stake through an initial public offering (IPO) on the Saudi Exchange (Tadawul) in what is set to be the kingdom’s first listing in 2025.

The brokerage is offering 49.94 million shares, according to a regulatory filing, representing 20 per cent of the company’s total issued share capital.

The final offer price will be determined at the end of the book-building process, with the final allocation scheduled for February 27.

The company appointed HSBC’s local unit as the sole financial advisor, bookrunner, global coordinator, lead manager, and underwriter for the deal.

“With the launch of our IPO, Derayah is embarking on an exciting new chapter that will further solidify its position as a leading independent digital investment platform in Saudi Arabia. In recent years, we have achieved exponential growth by capitalising on favourable local, regional, and global capital markets,” said Mohammed Al Shammasi, the CEO of Derayah.

The proceeds from the share sale will be distributed to the selling shareholders.

Founded in 2009, Derayah offers brokerage and trading services, which account for over 60 per cent of its total revenue, as well as asset and wealth management, with $4.03bn (SAR15.1bn) in assets under management as of the end of June.

The company reported a net profit of SAR228m in the first half of 2024, up 70 per cent from the same period last year, while its operating income rose by 63 per cent year-on-year to SAR434m.

Tadawul is the GCC region’s largest bourse, with an average traded value of more than $1bn. Last year, Saudi Arabia dominated the Middle East’s robust surge in new share sales, generating a record $4.1bn from 42 listings, according to a report by The Kuwait Financial Centre (Markaz).

With the kingdom continuing its push to diversify its economies and deepen its capital markets, market participants expect the rush of listings to continue.

Saudi Arabia is likely to see a string of listings, potentially including budget carrier flynas, buy-now-pay-later firm Tabby, tech firm Ejada, and the investment banking arm of Riyad Bank.

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