ABU DHABI: Lulu Retail initial public offering (IPO) that sought to sell 2,582 million (258.2 crore shares) was sold out within an hour, according to informed sources in Abu Dhabi.
The issue has been scheduled to remain open for subscription until November 5.
The IPO that was launched with a price band of AED1.94 to AED2.04, will in all probability have priced at the upper band of AED2.04 per share, with the issue size likely concluding at AED5.27 billion ($1.43 billion).
This would give the company a valuation of AED21.08 billion ($5.74 billion).
The IPO saw the holding company, Lulu International Holdings Ltd, sell 25 per cent of its shareholding in Lulu Retail holdings Ltd to the public through its initial public offering (IPO) which opened today (Ocrober 28) for subscription and schduled to remain open until November 5.
This will be followed by the listing of the company’s shares on Abu Dhabi Securities Exchange (ADX) on November 14.
Selling company
Yusuffali MA holds 80 per cent stake in the holding company that is divesting 25 per cent stake in Lulu Retail, whereas the remaining 20 per cent is held by the Abu Dhabi-based investment outfit, ADQ.
Interestingly, ADQ had bought 20 per cent stake in the holding company in 2020 at $1billion (AED3.67 billion) giving a valuation of $5 billion or AED18.35 billion to the holding company, as against a likely valuation of AED21.08 billion for Lulu Retail once the issue is successfully concluded.
Dividend
Businessbenchmark.news (bbn) in an earlier report has estimated the dividend distribution to be around 8 fils per share (on an annualised basis), provided the profitability momentum of Lulu Retail in the first half (H1) continues in the full current year, and the management decides to distribute 75 per cent of its profit as dividend to the shareholders.
If the dividend works out to be around 8 fils as estimated by bbn, and if the issue gets priced at the upper band of AED2.04, the dividend yield could work out around 3.92 per cent, slightly lower than the average yield the UAE’s listed companies offer.
