Saudi Bank NCB’s $6bn IPO 16 times Subscribed On Retail Side

The retail portion of the SAR22.5 billion ($6 billion) initial share sale by Saudi Arabia’s National Commercial Bank was 16 times subscribed late on the final day of the offer, the bank said on Sunday.

As of eight o’clock in the evening, 1.17 million subscribers had put up a total of 215.8 billion riyals for the 300 million shares offered to retail investors, which were priced at SAR45 each.

The final results of the share sale, the biggest ever conducted in the Arab world and the second-largest globally this year after Alibaba Group in New York, will be announced in coming days, the state-owned bank said. The offer ran between Oct. 19 and Nov. 2.

In addition to the retail portion, which comprises 15 per cent of its stock, Saudi Arabia’s biggest bank by assets is placing 200 million shares or 10 per cent of its stock with the state-run Private Pension Agency.

Investor demand for the share sale was overwhelming partly because Saudi authorities tend to price initial public offers of stock cheaply, using them to spread the Kingdom’s corporate wealth among its citizens.

Securities analysts said the SAR45 offer price was at a considerable discount to NCB’s true value, representing a price to book value of about two times while the Saudi banking sector’s average is roughly 2.2 times.