Tadawul is showing signs of a recovery with Tuesday seeing the first IPO to launch since the beginning of the Iran conflict and larger issuance expected to follow in the coming days.

Dar Albalad for Business Solutions began premarketing a deal of 21m shares for a 30% free-float.

The deal is relatively small – around SR200m (US$53.3m) – but will provide a crucial test of sentiment for the region, which has been in a holding pattern since the beginning of the conflict in late February. It is also something of an appetiser with an IPO of around SR3bn (US$799.9m) in Mutlaq Al Ghowairi Contracting expected to launch this week. 

Tadawul has proven one of the most resilient markets regionally with the financials and materials-heavy Tadawul All Shares Index now up 5.9% year to date.

“Saudi Arabia is seen as a safe haven for ECM,” said one banker in the region. “Dubai is struggling and we’re seeing asset rotation from GCC funds.”

"Saudi is in a better position [than the UAE]" said a second regional banker. "They can still export oil at higher prices through the Red Sea and the government will do what it can to stimulate the economy."

Right sectors

Both IPO candidates are relatively defensive with strong and diversified domestic client bases. 

Dar Albalad provides IT support and consulting services to private and government entities across insurance, healthcare, utilities and finance.

Bankers involved reported good visibility on demand with around 15 recent meetings with investors in Saudi Arabia, the UAE and UK leading to a clear shadow book.

Aftermarket performance will be key as a potential market reopener. Valuation is likely to come at 10–11 times 2026 P/E for a discount of around 35% to peers.

Dar Albalad reported 2025 net profit up 28% at SR50.5m off revenue of SR315.3m. Guidance points to revenue growth of 19% for 2026.

Books open on April 26 with a relatively quick bookbuild completing on April 30.

A 30% retail offer follows from May 10–14 with final allocations by May 18. Refund of excess subscriptions will take place by May 21 allowing the deal to complete before holidays for Eid al-Adha at the end of May.

Al Jazira Capital is financial adviser and joint bookrunner with Emirates NBD. 

MGC provides engineering, construction and maintenance services for sectors including water, transport and urban development. Its clients include Saudi Aramco, Doosan and Acciona.

The company has grown quickly, with revenue more than doubling between 2021 and 2023 to SR3.3bn from SR1.23bn and forecast to reach SR6.29bn for 2026.

The IPO has been a long time in the making, with preparations beginning in 2024 at the appointment of Al Rajhi Capital as financial adviser. The syndicate has been expanded, with Morgan Stanley joining the top line and Albilad Capital, ANB Capital, Arqaam Capital and Emirates NBD added as bookrunners. Moelis is advising.

Approval was given by the Capital Market Authority in January for an offer of 240m shares for a 30% free-float.

Alkhorayef Water and Power Technologies is seen as the key peer, with pricing expected to represent a discount on an EV/Ebitda basis.

Source IFR