Saudi Arabia’s Morabaha Financing set to raise $83.4m in IPO

Saudi Arabia’s Morabaha Marina Financing Company has started taking investor orders for its initial public offering (IPO) as the financing firm aims to raise as much as $83.4m (SAR 312.9m).

Morabaha Financing is offering 21,428,572 shares, equivalent to 30 per cent of the company’s paid-up capital and the company set the price range for its offering at SAR 13 to SAR 14.6 per share.

The company plans to announce the final offer price on May 21 at the end of the institutional book-building period.

The institutional bookbuilding period commenced on May 14 and will end on May 18 while subscriptions for individual investors will be open from May 28 to May 29. However, Morabaha Financing did not disclose an expected trading date.

The company intends to use the net proceeds to strengthen its capital base to support future growth in its business activities by generating additional capacity to provide financing to customers.

Founded in 2012, the independent non-bank finance institution offers Shariah-compliant financial services to individuals and small and medium-sized enterprises in Saudi Arabia.

Albilad Investment is acting as the sole financial adviser, book-runner, lead manager and underwriter of the offering.

Morabaha joins Saudi Arabia IPO boom

The Middle East IPO market has stood out as a bright spot globally despite the reported postponement of the listing of Aramco’s energy-trading business, and oil and gas driller ADES International Holding – which the Public Investment Fund backs.

Meanwhile, Saudi Arabia’s Jamjoom Pharmaceuticals Factory Company set the price range for its offering at SAR 56 to SAR 60 per share implying a total offering size of as much as SAR 1.3bn.

The pharmaceuticals company said institutional book building will start on May 15, when the price range will also be announced and end on May 22. The retail subscription period will run from May 30 to June 1 and final shares allocation will be on June 7.

JPMorgan Saudi Arabia and Saudi Fransi Capital are financial advisers on Jamjoom Pharma’s IPO. They are joined as underwriters and book runners by AlRajhi Capital. Saudi Fransi Capital is also a lead manager on the IPO.

GCC IPOs raised $3.5bn during the first three months of 2023, marking a 12 per cent year-on-year decline in value compared to the $4.6bn that was raised during the same period in 2022.

A report by Markaz shows that the UAE led the region in terms of IPO proceeds in the first quarter of the year, raising a total of $3.2bn from three offerings and recording an increase of 192 per cent in value compared to Q1 2022.

Saudi Exchange received 8 IPOs that raised a combined $72m, constituting 2 per cent of total GCC IPO proceeds. This represents a drop of 98 per cent YoY in value when compared to proceeds raised by Saudi IPOs in Q1 2022.

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