EFG Hermes concludes advisory on Lumi Rental’s $290m IPO

EFG Holding’s investment banking division, EFG Hermes, has completed advisory on the $290m initial public offering (IPO) of Saudi Arabia’s Lumi Rental Company. EFG Hermes acted as a joint bookrunner on the IPO.

Lumi Rental’s public offering marks EFG Hermes’ fifth IPO this year and is the latest in a series of transactions the investment bank has advised on in the GCC over the years.

Since the beginning of the year, EFG Hermes has advised on the IPOs of ADNOC L&S and ADNOC Gas on the Abu Dhabi Securities Exchange, Abraj Energy Services on the Muscat Stock Exchange and Al Ansari Financial Services on the Dubai Financial Market.

“We are immensely proud of the role we played in Lumi Rental’s IPO – a transaction that reflects the growing confidence of investors in the Saudi market, which has emerged as a global investment powerhouse following rigorous efforts to deepen the market and showcase the kingdom’s potential across various sectors,” said Mohamed Fahmi, EFG Hermes’ co-head of Investment Banking.

“Our distinctive role in this transaction was instrumental in diversifying the local demand witnessed in the majority of Saudi IPOs, as we successfully secured quality regional and global investor participation by leveraging our unparalleled global distribution network and top-notch research capabilities that consistently raise the bar in the Saudi market.”

Lumi Rental rose as much as 30 per cent on trading debut on the Saudi Exchange (Tadawul), as the demand for listings remains robust after a slow first half of the year.

Shares in the car rental firm opened at SAR72.6 on Monday up from the offer price of SAR66 per share.

The firm received $27bn in bids from institutional and retail investors during its IPO, with the portion reserved for funds almost 95 times oversubscribed.

The car rental company offered 30 per cent of its total issued share capital, equivalent to 16.5 million shares, and the indicative price implied a market capitalisation of SAR3.63bn at listing.

EFG Hermes spotlights Saudi potential

Meanwhile, Lumi Rental’s IPO comes on the heels of the EFG Hermes Saudi Forum in London this month, which was hosted in collaboration with the Saudi Exchange and played host to over 50 leading Saudi companies, including the Saudi Capital Market Authority and the Public Investment Fund.

The first of EFG Hermes’ flagship London conferences since 2019, this iteration was solely dedicated to Saudi Arabia.

Despite being the sixth-largest index in terms of market capitalisation in the MSCI Emerging Market Index, Saudi Arabia continues to be under-represented in the portfolios of EM investors.

The Saudi market is one of the largest and most liquid EM indices, with a market capitalisation of over $3tn as of September 2023.

The market has been attracting increased foreign inflows since its inclusion in major global indices such as the MSCI Emerging Markets Index in 2019 and FTSE Russell’s Emerging Markets Index in 2018.

It offers exposure to a wide range of sectors benefiting from Saudi Arabia’s strides to diversify the economy and implement strategic reforms under Vision 2030.

Read: EFG Hermes, Saudi Exchange showcase Saudi investment potential