Saudi IPO: Online Brokerage Derayah Soars in Latest Strong Debut - Bloomberg
Saudi Arabia’s Derayah Financial Co. surged in its debut after a 1.5 billion riyal ($400 million) initial public offering, a sign that appetite for Riyadh listings continues unabated.
Shares in the online brokerage jumped to as much as 39 riyals apiece on Monday, up 30% from the offer price of 30 riyals per share. That’s the maximum first day increase permitted on the Saudi exchange.
The firm sold a 20% stake, or 49.9 million shares, at the top end of a marketed price range which implied a valuation of 7.49 billion riyals.
Derayah’s IPO was 162 times oversubscribed by institutional investors, and books were covered within minutes of opening last month.
The deal is the latest in a string of strong debuts in Saudi Arabia, where shares in newly-listed companies have seen better early returns on average than elsewhere in the Middle East.
An online cosmetics retailer and a hospital group also reached the 30% maximum single-day price rise limit in their Riyadh debut in January, and Mecca-based developer Umm Al Qura for Development & Construction Co. drew about $126 billion in orders for its $523 million first-time share sale in Riyadh.
New share sales in Saudi Arabia raised just over $4 billion in 2024, with a wide range of companies lining up listings - including an airline, a buy-now-pay-later firm and a slew of car rental firms. Three firms from the Saudi wealth fund’s portfolio have lined up banks for share sales, Bloomberg News has reported.
Derayah’s net income reached 330 million riyals in 2023, yielding a 53% net profit margin. Its dividend payout ratio was 69%, and its chief executive said in an interview that the trend was similar in the first half of 2024.
Olayan Saudi Investment Co. joined as a cornerstone investor, agreeing to subscribe to around 2% of the company’s share capital.
HSBC Holdings Plc acted as sole bookrunner on the transaction.
Established in 2009, Derayah offers online brokerage, trading and asset management services. It had 15.1 billion riyals in assets under management as of June 2024, according to its website.
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