Saudi pharma retail chain Al Dawaa seeks $500m from IPO

Al Dawaa Medical Services, one of the largest pharmaceutical retail companies in Saudi Arabia, is seeking to raise about $500m from an IPO as more family-owned businesses list in the kingdom.

The initial public offering’s price range has been set at SAR65 ($17.33) to SAR73, according to a statement. Institutional book-building for 25.5 million shares will start Sunday and ends Thursday, with a three-day subscription period for individual investors starting February 27.

Share sales in Saudi Arabia have seen huge investor demand in the past year, with most IPOs getting priced at the top of offering ranges and then the shares surging on their trading debut. The Saudi benchmark index has jumped about 9 per cent this year, extending its 2021 gains of 30 per cent.

Al Nahdi Medical Co., the kingdom’s largest pharmacy retail chain, plans to seek about $1.3bn in an IPO in the next few months in what could be the largest share sale in the kingdom since state oil giant Saudi Aramco went public in 2019, people familiar with the matter said earlier this month.

While the kingdom’s wealth fund has been behind many of the biggest recent listings, an increasing number of Saudi family businesses are also capitalising on soaring demand for stocks and testing the equity markets. The pipeline for IPOs in the country is “deeper than ever,” the stock exchange’s chief executive officer Khalid al Hussan said in an interview in December.

Saudi Arabia’s economy, the biggest in the Middle East, has been boosted by the surge in oil prices and the government easing coronavirus lockdowns. Some of the biggest IPOs last year included offerings by ACWA Power, Solutions by STC and Saudi Tadawul Group.

GIB Capital is acting as the bookrunner for Al Dawaa Medical’s IPO.