Modern Mills Company debuts on Tadawul; IPO generated $40bn in orders

Image: Getty Images

Modern Mills Company, Saudi Arabia’s leading milling and nutrition enterprise, commenced trading on the Saudi Exchange (Tadawul) on March 27, after the successful completion of its initial public offering (IPO). The company, a key contributor to the kingdom’s food security, now trades under the symbol ‘2284’.

The IPO involved the offering of 24,549,600 shares, constituting 30 per cent of the company’s issued share capital. With 90 per cent of the shares allocated to institutional investors and 10 per cent to retail investors, the final offer price was set at SAR48 per share.

The book-building process witnessed robust interest from local, regional, and international institutional investors, resulting in a subscription coverage of approximately 127 times the total offered shares.

The IPO generated a staggering SAR150bn ($40bn) in orders, with a final offering size of SAR1,178m ($314m).

Modern Mills Company set for continued growth

Osama Ashi, CEO of Modern Mills Company, highlighted the overwhelming demand from both institutional and retail investors. he emphasised the company’s exceptional equity story, operational excellence, and strategic direction, underpinned by significant market share growth and leadership in key product categories. “Our institutional offer was oversubscribed by approximately 127 times pricing our shares at the top end of the set price range, while our retail offer had a subscription coverage of 21.9 times, signalling robust interest in the company’s solid equity story, best-in-class operational model, highly experienced management team, and strategic direction. Among milling companies, Modern Mills Company has recorded the highest increase in flour market share in 2022 and leads the animal feed market.

“Our growth trajectory is underpinned by a track record of profitability, cash generation, and rewarding shareholders.”

Ashi also outlined the company’s growth strategy, focusing on expanding market share, investing in technology and talent, diversifying the product portfolio, and venturing into new markets. He said the company remains committed to contributing to Saudi Arabia’s Vision 2030 objectives and ensuring a sustainable food landscape for future generations.

Modern Mills Company appointed HSBC Saudi Arabia and Emirates NBD Capital Saudi Arabia as financial advisors and coordinators for the IPO, with Moelis & Company Saudi Limited serving as the advisor to the selling shareholders. Saudi National Bank and Al Rajhi Bank acted as receiving agents for the individual investor tranche.

Read: Here’s why the GCC IPO bonanza is here to stay