Lulu Retail Holdings Plc’s upcoming initial public offering in Abu Dhabi is poised to raise $1.43 billion, likely pricing at the top end of its range, making it the United Arab Emirates’ largest listing this year.
Lulu’s Abu Dhabi IPO set to price at top
According to deal terms reviewed by Bloomberg News, the IPO is expected to be priced at 2.04 dirhams ($0.56) per share, the high end of a range starting at 1.94 dirhams. This valuation places Lulu’s market capitalization at approximately 21.1 billion dirhams.
Investor demand was strong, with all available shares subscribed within the first hour after books opened last week. This IPO surpasses the $877 million listing by NMDC Energy earlier this year, positioning it as 2023’s biggest public offering in the UAE. Lulu plans to sell 2.58 billion shares, representing a 25% stake, with final pricing anticipated on November 6 and trading set to commence on November 14.
Recent Lulu earnings
Lulu, one of the Middle East’s largest hypermarket chains, reported $192 million in profit last year and has committed to a 75% dividend payout ratio. The company expects to increase its net profit margin to 5% over the medium term, up from 2.6% in 2023, according to CEO Yusuff Ali. Lulu also plans an aggressive expansion, aiming to open 90 new stores in the Gulf region over the next five years, primarily in Saudi Arabia and the UAE.
Abu Dhabi Commercial Bank PJSC, Citigroup Inc., Emirates NBD Capital, and HSBC Holdings Plc are acting as joint global coordinators, with Moelis & Co. advising on the deal.
