Arabian Mills for Food Products Co.’s initial public offering (IPO) in Saudi Arabia was fully subscribed within just an hour of the books opening, underscoring the strong investor demand in the kingdom’s equity markets. The flour milling company aims to raise up to $271 million by selling a 30% stake, equivalent to approximately 15.4 million shares, on the Saudi stock exchange. Institutional investors quickly covered the order book within the price range of 62 riyals to 66 riyals ($16.50 to $17.60) per share, according to sources familiar with the transaction.
The book-building process for institutional investors will run from September 1 to September 5, with the final pricing expected to be announced on September 11. Retail investors will have their opportunity to subscribe from September 18 to September 19.
This rapid sellout follows the recent IPO of Saudi perfume maker Al Majed for Oud Co., which also saw overwhelming demand. The flurry of activity suggests that Saudi Arabia’s IPO market is likely to remain robust throughout 2024, following a strong first half of the year that included a $12 billion secondary offering from Saudi Aramco.
Saudi Aramco’s offering was fully subscribed within hours, as was the $763 million IPO by Dr. Soliman Abdul Kader Fakeeh Hospital earlier this year. Arabian Mills is the fourth Saudi flour milling company to go public after the government privatized the state-controlled industry by splitting it into four companies.
First Milling Co. and Modern Mills Co. are already listed on the Saudi stock exchange, while Fourth Milling Co. received approval for an IPO in June. Arabian Mills has appointed HSBC Saudi Arabia as its sole financial adviser, global coordinator, book-runner, underwriter, and lead manager. Al Rajhi Bank, Saudi Awwal Bank, and Banque Saudi Fransi are serving as receiving agents.
