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Saudi brokerage platform Derayah Financial’s shares surged 30% on its debut trade, signalling a growing investor appetite from regional and international investors, said analysts.
Shares in the Saudi firm opened at 33 riyals ($8.80), 10% higher from the set price of SAR 30 per share, at top of the range. Early trade saw the shares soar 30% to SAR 39, the maximum-permitted limit set by Tadawul during the first three days of newly listed stock and remained there until closing.
“The euphoria and buying frenzy for newly listed Saudi stocks continue with today’s first-day listing gains seen in Derayah Financial Co. stock prices. The stock was locked into the upper circuit within hours of the opening, owing to the exchange rules book,” Vijay Valecha, Chief Investment Officer, Century Financial, told Zawya.
The 30% surge on the first day of trade historically bodes well for a stock’s future price trajectory.
“For most of the listed stocks on the Saudi Tadawul exchange, the investor appetite for their long-term performance has broadly followed its initial days’ listing gains,” he said. “The company’s primary IPO placement activity has supported its secondary market gains today.”
Derayah Finanical’s SAR 1.5 billion IPO saw a total of 49.94 million shares sold in the offering, representing 20% of the company’s issued share capital, through a partial sale by its current shareholders in proportion with their existing shareholdings.
The book building process generated an order book worth SAR 243 billion, reflecting subscription coverage of 162x the total offered shares. Similarly, the individual investor tranche witnessed subscriptions from 586,422 retail subscribers, worth a total demand of SAR 2.3 billion, reflecting a subscription coverage of approximately 15x the offering shares in this tranche.
The final offer price implied a market capitalisation SAR 7.5 billion at listing.
“The company’s IPO was subscribed 162 times in the institutional segment, with the offer getting oversubscribed in minutes. For the broader Saudi market, the IPO success is more visible and triumphed over its peers like the UAE. The average post-listing gains for Saudi stocks have been 37% compared to 18% for UAE over the last one-year period,” Valecha said.
Derayah Financial is the third listing on Tadawul this year, following the successful debut of Almoosa Health Co. on January 7 and Nice One on January 8. The float also marks a first for a financial firm in in Saudi in 2025.
HSBC Saudi Arabia was appointed as sole financial advisor, bookrunner, global coordinator, lead manager and underwriter for the Derayah Financial IPO.
(Reporting by Bindu Rai, editing by Seban Scaria)
