Lulu Retail boosts IPO size to 30% on strong demand

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Lulu Retail, one of the largest supermarket chains in the Gulf, has increased the size of its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX) to 30 per cent of its shares, up from the previously planned 25 per cent, citing strong demand and the addition of a new cornerstone investor.

The total offering has been expanded to 3.1 billion shares, with Lulu International Holdings, the company’s sole shareholder, offering the additional shares to professional investors.

The increase will see 516 million more shares being allocated to meet the high demand, according to a statement released by the company on Monday. The price range for the shares remains unchanged at between Dhs1.94 and Dhs2.04 per share.

Based on the pricing range, Lulu Retail is now set to raise between Dhs6.01bn and Dhs6.32bn, placing the company’s market capitalisation between Dhs20.04bn and Dhs21.07bn.

The subscription period for the IPO opened on October 28 and will close on November 5 for both retail and professional investors.

The final offer price will be determined through a book-building process, with the price expected to be announced on November 6. Lulu Retail plans to begin trading on the Abu Dhabi Securities Exchange on November 14.

Strong investor demand drives offer expansion

Saifee Rupawala, CEO of Lulu Retail, commented on the decision to increase the IPO size: “The established pan-GCC presence of Lulu Retail and our clear strategy for growth has attracted a highly diverse investor base. We’re pleased to increase the total size of the offering to cater to the significant level of demand received from international, regional, and local investors, and the inclusion of additional cornerstone investors to the IPO.”

The new cornerstone investor is Saudi Arabia’s Masarrah Investment Company, which has agreed to invest Dhs250m in the offering. This brings the total commitment from cornerstone investors to approximately Dhs1bn.

Other cornerstone investors include the Abu Dhabi Pension Fund, Bahrain’s Mumtalakat, Emirates International Investment Company, and the Oman Investment Authority.

Lulu Retail: Expansion plans

Lulu Retail, headquartered in Abu Dhabi, currently operates 240 stores across the Gulf region, with plans to open an additional eight stores in the UAE, Saudi Arabia, and Oman by the end of 2024.

The company has already opened 13 stores in the UAE this year, and it aims to add 19 more in 2025, primarily in the UAE and Saudi Arabia.