Dubai, UAE – Middle East and North Africa witnessed 48 Initial Public Offerings (IPOs) that raised $10.7 billion in 2023, according to a report by the consultancy firm EY.
Five listings, mainly in the energy and logistics sectors, contributed 58 percent towards the total IPO proceeds raised, said the EY MENA IPO Eye Q4 2023 report.
During Q4 2023, 19 IPOs raised $4.9 billion in proceeds. ADES Holding Company raised the most funds and contributed 25 percent of the overall IPO proceeds in the last quarter, followed by Pure Health Holding with 20 percent.
All Q4 listing activity took place in the GCC region, with Egypt being the only non-GCC country that reported IPOs throughout 2023.
Investor confidence in the region continues, with 11 out of the 19 Q4 2023 IPOs recording a first-day gain in share price. At the end of 2023, 26 out of the 48 IPOs showed a positive return compared to their listing price, with Armah Sports Company achieving the highest gain at 72 percent.
Last year recorded a 6 percent decrease in the number of IPOs and a 51 percent drop in proceeds, compared to 2022. Notably, 2022 witnessed a significant number of IPOs, such as Americana Restaurants International (Americana), Saudi Aramco Base Oil Company (Luberef) and Arabian Drilling Company, which played a role in the decline seen in 2023.Â
The 2024 pipeline includes 29 companies across various sectors announcing their intention to list, with Saudi Arabia and the United Arab Emirates (UAE) leading the way in terms of expected volumes. Outside the GCC, Egypt has four IPOs planned.
Brad Watson, EY MENA Strategy and Transaction Leader, said the 2024 pipeline includes 29 companies across various sectors, announcing their intention to list with the KSA and the UAE leading the way in terms of expected volumes.
Saudi dominates listings
Once again, KSA reaffirmed its dominance in terms of IPO activity in the region with 14 of the 19 listings in Q4 2023. ADES Holding Company marked the highest proceeds at $1.2 billion, followed by SAL Saudi Logistics Services Company at $0.7 billion. Both IPOs were listed on the Tadawul Main Market. The remaining 12 IPOs, raising $140 million in total, took place on the Nomu – Parallel Market, which also witnessed the quarter’s only direct listing in the MENA region – Almujtama Alraida Medical Co.
In 2023, the country’s IPOs came from a variety of sectors, led by energy (36 percent), transportation (29 percent) and healthcare (10 percent).
Q1 2024 kicked off with two Saudi listings on Tadawul in January – MBC Group, raising $222 million, and Avalon Pharma, raising $437 million.
Gregory Hughes, EY MENA IPO and Transaction Diligence Leader, said, “The MENA IPO market delivered a healthy number of IPOs across various sectors in 2023, despite the subdued global economic backdrop and the rising geopolitical tensions in the Middle East. A number of reputable large state-owned companies listed in 2023, including the Dubai Taxi Co and OQ Gas Networks.”
“As expected, 2024 started off positively with the MBC listing, Avalon Pharma and the announcements of several IPOs on the MENA markets including large private and state-owned names,” he said.
UAE reports four new listings
Abu Dhabi Securities Exchange (ADX) welcomed three IPOs in Q4 2023, raising a combined total of $1.8 billion. These included Pure Health Holding, valued at $987 million, Investcorp Capital at $451 million and Phoenix Group at $371 million. Pure Health Holding reported the highest first-day gain of 76 percent. In addition, there was one new listing in the transportation sector on the Dubai Financial Market (DFM) – Dubai Taxi Company, worth $315 million.Â
Oman records its largest IPO to date
The Muscat Stock Exchange (MSX) saw the largest IPO in Oman to date with OQ Gas Networks SAOC raising $772 million. Meanwhile, Oman Investment Authority (OIA), the country’s sovereign wealth fund, is preparing to launch multiple IPOs and list state assets to strengthen its capital markets.