RIYADH: The initial public offering (IPO) of Derayah Financial has marked a noteworthy event in Saudi Arabia’s burgeoning capital markets, showcasing robust retail demand and significant institutional interest.
The brokerage platform successfully raised nearly 2.3 billion Saudi riyals (approximately $613 million), which accounted for 10% of the total offering, underscoring the growing appetite for investment opportunities among retail investors in the region.
The IPO attracted an impressive participation of 586,422 retail subscribers, leading to a remarkable subscription coverage of approximately 15 times the offered shares in this tranche.
The overwhelming response reflects not only the confidence of retail investors in Derayah Financial’s business model but also the broader market sentiment towards the Saudi economy’s resilience and growth potential.
Viable investment opportunity
In terms of share allocation, retail investors will receive a minimum of eight shares each, with the remaining shares distributed on a pro-rata basis according to the level of demand. This equitable approach to share distribution aims to ensure that a diverse range of investors can participate in the offering, fostering a more inclusive investment environment.
On the institutional side, the book-building process concluded with an astounding over-subscription rate of 162 times, with recorded orders amounting to approximately SAR243 billion. Such overwhelming demand from institutional investors highlights the attractiveness of Derayah Financial as a viable investment opportunity, further reinforcing the company’s market position.
The final offer price was set at SAR30 per share, at the top of the indicative range, resulting in a market capitalisation of SAR7.5 billion at the time of listing. This valuation not only reflects investor confidence but also positions Derayah Financial favorably within the competitive landscape of the Saudi financial services sector.
HSBC Saudi Arabia played a pivotal role in this IPO, serving as the sole financial advisor, bookrunner, global coordinator, lead manager, and underwriter. Their expertise and guidance were instrumental in navigating the complexities of the IPO process, ensuring a successful outcome that benefits both the company and its investors.
As anticipation builds for the trading date of this SAR1.5 billion Tadawul IPO, the successful launch of Derayah Financial’s shares stands as a testament to the vitality of the Saudi capital markets. This IPO not only enhances the investment landscape for retail investors but also signals a promising trajectory for future offerings in the region, fostering a culture of investment and economic growth.
