GCC records highest number of IPOs in 2022: Markaz

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GCC markets, over the past seven years, witnessed the highest number of companies going public in the year 2022 with 27 IPOs raising a total of $14.5 billion, said Kuwait Financial Centre (Markaz) in a new report.

Markaz’s “GCC Equity primary Offerings” overview it reported that GCC witnessed a total of 90 initial public offerings (IPO) in the period from 2016 – August 2022, with a total offering amount of $55.9 billion as of August 31, 2022.

Whereas the year 2019 witnessed the highest value for IPO offerings with total of $27.3 billion, out of which Saudi Aramco’s offering constituted 94% of the total value offered for the year.

GCC Equity Primary Offerings: 2016 –August 31, 2022

Total value by country

In the period from 2016 - August 31, 2022, Saudi Arabia’s stock market witnessed both the highest number of IPOs and the largest total offering amount among GCC stock markets, with a total of $38.9 billion of proceeds through 60 IPOs. It is followed by the UAE with total equity primary offerings value of $14.5 billion through 11 IPOs.

Abu Dhabi Securities Exchange (ADX) accounted for 46 per cent of total UAE equity primary offerings with a total of $6.7 billion raised while the Dubai Financial Market (DFM) accounted for 54 per cent with a total of $7.9 billion raised. During the same period, Boursa Kuwait witnessed a total 5 IPOs with a total offerings value of $803 million.

Sector allocation

In the past seven years, The Energy sector constituted 49 percent of total GCC equity primary offerings raising a total of $27.7 billion in proceeds. It is worth noting that Saudi Aramco’s IPO in 2019 constitutes about 92% of the GCC Energy sector’s primary offerings. The Utilities and Materials sectors follow with 14 percent and 6 percent, respectively, of total GCC equity primary offerings raising a total of $7.6 billion and $3.5 billion, during the same period.

Top equity offerings

Saudi Aramco’s IPO on Tadawul was the largest GCC equity offering by value after its 2 percent share sale, making it the largest IPO in history for the region and globally, with a total value of about $25 billion. Dubai Electricity and Water Authority (Dewa) and Borouge came in second and third respectively after their equity offering in 2022, where Dewa offered 9 billion shares on DFM at an offer price of AED2.48 (total value of $$6.1 billion), while Borouge offered 3.0 billion shares on ADX with an offer price of AED2.45 (total value of $$2.0 billion).

GCC equity primary offerings: YTD 2022 (As of August 31, 2022):

For the year 2022, GCC markets raised a total of $14.5 billion through 27 IPOs with the month of February witnessing the highest activity with 7 IPOs raising a total of $2.1 billion, whereas April 2022 witnessed the largest IPO by value for the year after the $6.1 billion offering of Dewa.

Total IPO value by country

In 2022, the UAE witnessed the highest offering amount for the year with a total value of $9.7 billion being raised through 5 IPOs. DFM accounted for 67 percent of total UAE equity primary offerings for the year with a total of $6.5 billion being raised in proceeds while ADX accounted for 33 percent with a total of $3.2 billion being raised in proceeds. Saudi Arabia saw the highest IPO volume, compared to its GCC peers, with 20 IPOs raising $4.5 billion in proceeds.

Boursa Kuwait witnessed 1 IPO with Ali AlGhanim Sons Automotive Company raising a total of $323 million through its IPO. The automotive company floated 45% in June 2022 by offering 124,875,000 shares with an offer price of 793 fils.

Sector allocation

The Utilities sector constituted 42 percent of total GCC equity offerings for the year where the sector raised $6.1 billion in proceeds following Dewa’s offering, followed by Materials and Consumer Staples raising a total of $2.5 billion which constituted 17 percent and $2.0 billion which constituted 14 percent, respectively.

Top equity offerings

Dewa’s IPO on DFM raised the most proceeds at $6.1 billion in April 2022 after its 18 percent share sale, making it the largest GCC IPO for the year and biggest IPO for the region since Saudi Aramco’s 2019 offering. As of 31 August 2022, Dewa constituted 42% of total GCC IPO amount YTD.

Borouge PLC came in second after successfully listing on ADX in June 2022, making it the largest-ever IPO for Abu Dhabi. The company floated 10 percent of its total issued share capital, raising a total of $2.0 billion which constituted 14 percent of total GCC equity offerings YTD.