Saudi Arabia's Tadawul to sell 30% of share capital in IPO

Saudi Tadawul Group, the owner and operator of the kingdom’s stock exchange, on Sunday announced its intent to proceed with an initial public offering after receiving regulatory approval.

The holding company plans to sell 36 million shares or 30 per cent of its 120 million issued share capital to the public, it said in a statement on Sunday.

The company’s shares will be listed on the main index of the Saudi Exchange, the Arab world’s biggest bourse by market value, once offering and listing formalities are completed, it said. The date of the listing was not provided.

The company, which received approval for the public float from the Saudi Arabia's Capital Markets Authority on November 4, said the final offering price will be determined at the end of the book-building period. It did not provide the timeline of the book-building process.

The kingdom’s sovereign wealth fund, the Public Investment Fund, which is the sole owner of the company, is selling the shares that will be offered to both retail and institutional investors, Tadawul said.

All the offer shares will be offered to institutional investors, with a clawback to retail investors of up to 10 per cent of the offered shares, the company said.

Tadawul, which is among the top 10 global stock markets, with a market capitalisation of about $2.8 trillion, will become only the third publicly traded regional stock exchange after the Dubai Financial Market and Boursa Kuwait, once it is listed.

“Today’s announcement marks a major milestone in the company’s growth story and is the natural next step as we emerge as a Saudi powerhouse with a global mindset that is able to leverage scale, innovation and execution capabilities to drive long-term value for all our stakeholders,” Tadawul chairwoman Sarah Al Suhaimi said.

The listing will help achieve the “nationwide goal of the successful delivery of Saudi's Vision 2030”, which is “aligned” with the strategy of the PIF, she added.

Tadawul Group has four subsidiaries that include: the Saudi Exchange, a dedicated arm running the kingdom's equity market previously known as the Saudi Stock Exchange Company; the Securities Clearing Centre Company (known as Muqassa); the Securities Depository Centre Company (Edaa); and a new subsidiary focused on applied technology services known as Wamid.

“The operational independence of each subsidiary is expected to promote an agile environment, supporting growth and innovation and enabling rapid responses to evolving global and regional market trends,” the company said.

Tadawul’s benchmark equities index has risen more than 35 per cent since the beginning of the year, driven by new listings and improved investor sentiment on the back of higher oil prices.

Energy company Acwa Power listed its shares on the Saudi Exchange last month after it raised $1.2bn through its IPO. It was the kingdom's largest listing since state oil company Saudi Aramco went public in 2019.

Among others, the Saudi bourse is also home to Sabic, the biggest petrochemicals producer in the Middle East, and Saudi National Bank, the largest commercial lender in the kingdom.