Lulu Retail Holdings Plc is set to price its Abu Dhabi IPO at the high end of its target range, aiming to raise $1.43 billion in what is expected to be the United Arab Emirates’ largest stock listing of the year. The IPO will likely price at 2.04 dirhams ($0.56) per share, topping a range that started at 1.94 dirhams, giving the company a valuation of approximately 21.1 billion dirhams.
Demand for shares surged immediately after the books opened last week, with all shares offered being quickly accounted for. Lulu’s offering is on track to surpass NMDC Energy’s $877 million IPO earlier this year, which was the UAE’s largest prior to this.
Through the IPO, Lulu plans to sell 2.58 billion shares, representing a 25% stake in the company. Final pricing will be confirmed on November 6, with trading expected to start on November 14.
The hypermarket chain, one of the largest in the Middle East, recorded a profit of $192 million last year and aims to maintain a dividend payout ratio of 75%. The company’s net profit margin is projected to grow to 5% in the medium term, up from 2.6% in 2023, according to its CEO.
Founded by Indian entrepreneur Yusuff Ali, Lulu International Holdings is focusing its expansion plans on the Gulf region, with a target to open around 90 new stores over the next five years, primarily in Saudi Arabia and the UAE.
Abu Dhabi Commercial Bank PJSC, Citigroup Inc., Emirates NBD Capital, and HSBC Holdings Plc are serving as joint global coordinators for the IPO, while Moelis & Co. is advising on the deal.
