Saudi Bank NCB’s $6bn IPO 23 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 23 times subscribed, the bank said on Wednesday, quoting the final results of the offer.

A total of 1.25 million subscribers – roughly one in every 16 Saudi citizens – put up a total of SAR310.7 billion for the 300 million shares offered to retail investors, which were priced at SAR45 each.

The share sale, which ran from Oct. 19 to Nov. 2, was the biggest ever conducted in the Arab world and the second-largest globally this year after Alibaba Group in New York.

Excess funds collected in the offer will be returned to subscribers as soon as possible and no later than next Sunday, the bank said.

The retail portion comprised 15 per cent of the bank’s stock. In addition, 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.

Demand for the share sale was huge partly because Saudi authorities tend to price initial public offers of equity cheaply, using them to spread corporate wealth among citizens.

Analysts said the offer price was at a large discount to NCB’s underlying value; the bank’s price to book value has been estimated at about two times, against an average for the Saudi banking sector of around 2.2 times.