Lulu Group International, a leading retail giant in the UAE, is set to raise $1.7 billion to $1.8 billion by selling 25% of its retail arm and sourcing businesses through an Initial Public Offering (IPO). This move implies a company valuation of $6.5 billion to $7 billion, according to sources familiar with the matter.
IPO Launch on Abu Dhabi Securities Market (ADX)
Lulu Group is expected to announce its official plans for the IPO on the Abu Dhabi Securities Market (ADX) early next week. The IPO pricing will be confirmed by the end of October, and a portion of the shares will be allocated to the company’s employees. Trading on ADX is projected to begin by mid-November.
While Lulu Group had earlier explored the possibility of a dual listing on the Saudi Exchange (Tadawul), sources indicate that this plan has been postponed, though discussions remain ongoing for future consideration.
Banks and Advisors Leading the IPO
The retail conglomerate has enlisted a group of leading banks to facilitate the IPO process. These include Emirates NBD Capital, HSBC Holdings, Abu Dhabi Commercial Bank, and Citigroup. Additionally, Moelis & Co. has been retained as the financial advisor for the offering.
Lulu Group’s Expansive Retail Empire
Founded by Yusuff Ali in the 1990s and headquartered in Abu Dhabi, the Lulu Group operates an extensive network of 260 stores and 24 shopping malls across the GCC, Egypt, India, and the Far East. The company has diversified into multiple sectors, including shopping mall development, manufacturing, trading, hospitality, and real estate.
The group’s expansion strategy received a boost in 2020 when ADQ acquired a 20% stake in the company for over $1 billion, supporting its growth in the Egyptian market.
Debt Refinancing and Expansion Plans
In August 2023, Lulu Group raised 10 billion UAE dirhams to refinance its debt in preparation for the IPO. The company’s expansion plans include opening 80 new hypermarkets across the GCC, Egypt, and other regions, with a focus on improving supply chain networks and enhancing e-commerce capabilities.
IPO Landscape in Abu Dhabi
Lulu Group’s IPO is poised to be the fourth major listing on ADX in 2024, following the successful public offerings of NMDC Energy (which raised $877 million), Alef Education Holding Plc. (which raised $515 million), and ADNH Catering, which is scheduled to list its shares on October 23.
This IPO also follows in the footsteps of Spinneys, another major retail operator in the UAE, which raised AED 1.38 billion ($375 million) through its April IPO on the Dubai Financial Market (DFM).
