The IPO scene in MENA remains robust and shows promising prospects

The IPO activity in the Middle East and North Africa region has shown robust growth and resilience to global economic fluctuations. In the second quarter of 2023, Saudi Arabia emerged as a powerhouse, leading IPO dominance by contributing to 11 of the 13 IPOs in the region.

According to EY’s latest MENA IPO Eye report, the Middle East and North Africa (MENA) region saw a notable spike in IPOs, with 13 IPOs raising $1.8 billion in combined proceeds. This represents a significant increase of 44% compared to the same period in 2022.

Notably, Saudi Arabia was significantly involved in the rally, with four listings on the main Tadawul market raising $800 million in capital and seven listings on the parallel Nomu market raising $100 million in total brought in.

Jamjoom Pharmaceuticals Factory and First Milling made waves on the Saudi Arabian IPO landscape, while the United Arab Emirates’ Abu Dhabi National Oil Company (ADNOC) also stood out with its significant IPO.

ADNOC Gas, a subsidiary of state-owned oil giant Abu Dhabi, led the way with a $2.5 billion IPO, securing its place as the largest global IPO for the quarter. ADNOC offered 15% of ADNOC Logistics & Services shares in an initial public offering on the Abu Dhabi Stock Exchange.

Listings on Nomu included TAM, a Riyadh-based digital solutions and management consulting company.

However, IPO growth in the MENA region wasn’t just limited to the second quarter. In the first quarter of 2023, Middle East companies collectively contributed nearly 16% of total global IPO proceeds, reflecting the region’s steady momentum after a successful 2022. The gains have been underpinned by the relative resilience of key economies, including Saudi Arabia and the United Arab Emirates, with low debt levels and ongoing reform initiatives.

While the MENA region saw a 33% year-over-year decline in the number of IPOs and a 14% fall in value in the first quarter, the global IPO landscape saw an even more significant decline, with a 61% decline in volume and 299 companies overall Raised $21.5 billion.

Looking ahead, the prospects for the MENA IPO scene remain promising, according to the EY report. “The region’s strategic positioning and economic reforms are likely to attract more listings, with Saudi Arabia notably planning 23 listings on Tadawul in the second half of the year.”