A.SREENIVASA REDDY (ABU DHABI)
Lulu Retail’s Initial Public Offer (IPO) is oversubscribed 25 times across all tranches, the company announced in a statement.
Lulu also confirmed the final offer price at the top end of the range — Dh2.04 per share, implying a market capitalisation Dh21.07 billion.
The offering raised gross proceeds of Dh6.32 billion ($1.72 billion), making it the largest UAE IPO of 2024 to date.
The offering received orders of more than Dh135 billion ($37 billion) from local, regional, and international investors, excluding cornerstone investors, the statement said. A cornerstone investor is typically a large institutional investor who commits to purchasing a significant portion of the shares. Bahrain and Oman sovereign funds are among this group of investors for the Lulu IPO.
This unusual investor interest is a record for a non-government UAE IPO over the past 10 years, the company said.
The IPO received exceptional retail investor interest, with more than 82,000 individual investors bidding for the shares.
The IPO offered over three billion shares, constituting 30% of the company’s value. The total offer size was increased from 25% to 30% during the book building period to cater to the significant interest from investors.
Lulu Retail shares are expected to commence trading on the Abu Dhabi Securities Exchange (ADX) on November 14. Lulu Retail is said to be the 100th listing on ADX.
Saifee Rupawala, Chief Executive Officer of Lulu Retail, said: “We’re extremely proud to see such strong demand for the Lulu Retail IPO. It is a sign that investors share our passion and excitement for the company. We look forward to rewarding the trust shown by investors in Lulu.”
Lulu Retail is an iconic brand with 240 stores across six GCC countries and is owned by Indian businessman Yusuff Ali MA, based in Abu Dhabi.
Striking a note of caution, Vijay Valecha, Chief Investment Officer at Century Financial, said a similar supermarket brand — Spinneys’ IPO — was oversubscribed 64 times in aggregate. It was listed earlier in the year on Dubai Financial Market (DFM).
“It must be noted that the LuLu IPO occurred just ahead of the US elections, an event that could potentially cause heightened volatility; hence, given the same, many retail investors may be exhibiting caution,” said Valecha, who is a seasoned observer of the UAE capital markets.
Investors who subscribed to the first and third tranches will receive an SMS confirmation of their respective allocation starting from November 12, with refunds due to commence from November 13.
The shares will trade on the ADX with ticker symbol LULU and International Securities Identification Number(ISIN) will be AEE01487L240