Lulu Retail Raises $1.72 Billion In UAE’s Largest IPO Of 2024, Priced At $0.56 Per Share

Jibran Munaf
Jibran Munaf

Image: Lulu Group

Lulu Retail Holding has set the price of its initial public offering at AED2.04 ($0.56) per share, marking the top of its indicative range and valuing the company at AED21.1 billion ($5.75 billion). The IPO raised a record-breaking $1.72 billion, making it the largest IPO in the UAE this year.

The offering saw extraordinary demand, attracting over AED135 billion ($37 billion) in subscriptions from local, regional, and international investors, with the IPO oversubscribed by more than 25 times across all tranches, excluding cornerstone investors. A strong retail response was evident as over 82,000 retail investors subscribed to the offering.

Earlier this week, Lulu expanded its offering from 25% to 30% of the company’s shares, bringing the total share allocation to 3.098 billion. The additional shares, totaling 516.4 million, were allocated exclusively to the Qualified Investor Offering (Tranche Two) for professional investors.

The IPO attracted major cornerstone investors, including Masarrah Investment Company from Saudi Arabia, which committed AED 250 million. Other prominent backers include the Abu Dhabi Pension Fund, Bahrain’s Mumtalakat Holding Company, Emirates International Investment Company LLC, and Oman’s Investment Authority.

Lulu Retail has committed to a dividend payout of 75% of annual distributable profits after tax, to be paid semi-annually, which may appeal to income-focused investors.

The company’s shares are expected to begin trading on the Abu Dhabi Securities Exchange (ADX) on November 14. The IPO was managed by a syndicate of prominent financial institutions, including Emirates NBD Capital, HSBC Holdings, Abu Dhabi Commercial Bank, and Citigroup as joint bookrunners, with Moelis & Co. acting as financial advisors. Joint lead managers included Abu Dhabi Commercial Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC Bank Middle East, and EFG Hermes.