Lulu Retail Holdings Plc’s shares closed flat at AED2.04 in their debut on the Abu Dhabi Securities Exchange (ADX) following a highly anticipated IPO that raised $1.72 billion. Despite the IPO’s oversubscription—exceeding AED135 billion in demand from local and foreign investors—the stock’s trading day remained steady, fluctuating between AED2.05 and AED1.99 before settling at the opening price.
Around 247 million shares were traded in over 8,500 transactions, with turnover surpassing AED500 million. Analysts suggest that investor expectations for first-day profits in UAE IPOs may have contributed to an initial sell-off after the stock didn’t surge, reflecting recent trends seen in other UAE listings, such as Spinneys.
Lulu’s major investors include sovereign wealth funds from Bahrain, Oman, and the UAE. BHM Capital Financial Services has been appointed as a liquidity provider for the stock on ADX, a move intended to stabilize trading.
Looking forward, any upward trend in Lulu’s share price may depend on the company’s performance relative to its IPO roadshow guidance. Vijay Valecha of Century Financial notes that Lulu’s fundamentals are strong, citing rising EBITDA margins and CEO Yusuff Ali’s optimistic forecast for net profit margin growth. Analyst Nishit Lakhotia of Sico Bank cautions that any significant stock rally may be tied to Lulu meeting or exceeding these growth targets.
