IPO scene in MENA remain robust and shows promising prospects

IPO activity in the Middle East and North Africa region has shown robust growth and resilience in the face of global economic fluctuations. In the second-quarter of 2023, Saudi Arabia emerged as a powerhouse, spearheading IPO dominance by contributing to 11 out of the 13 listings in the region.

According to EY’s latest MENA IPO Eye report, the Middle East and North Africa (MENA) region witnessed a remarkable surge in public listings, with 13 IPOs collectively amassing $1.8 billion in proceeds. This marked a significant 44% increase compared to the same period in 2022.

Notably, Saudi Arabia's involvement in the surge was substantial, featuring four listings on Tadawul’s main market, which garnered $800 million in capital, and seven listings on the parallel Nomu market, accumulating $100 million.

Jamjoom Pharmaceuticals Factory and First Milling made waves in the Saudi Arabian IPO landscape and the UAE’s Abu Dhabi National Oil Company (ADNOC) also stood out with its substantial IPO.

ADNOC Gas, a subsidiary of Abu Dhabi's state oil giant, was the standout performer with a $2.5 billion IPO, securing its place as the largest IPO globally for the quarter. ADNOC offered 15% of ADNOC Logistics & Services shares through an IPO on the Abu Dhabi stock exchange.

Among the listings on Nomu was TAM, a Riyadh-based digital solutions and management consulting company.

However, IPO growth in MENA wasn’t isolated to the second quarter alone. In the first quarter of 2023, Middle East companies collectively contributed nearly 16% of the total global IPO proceeds, reflecting the region’s steady momentum following a successful 2022. The achievements was backed by the resilience of key economies including Saudi Arabia and the UAE, relatively low debt levels, and ongoing reform initiatives.

While the MENA region experienced a 33% decline in the number of IPOs and a 14% drop in value in Q1 compared to the previous year, the global IPO landscape saw an even more significant contraction, with a 61% drop in volume and 299 companies collectively raising $21.5 billion.

Looking ahead, the prospects remain promising for the IPO scene in MENA, according to the EY report. “The region's strategic positioning and economic reforms are likely to attract more listings, with Saudi Arabia notably planning 23 listings on the Tadawul in the latter half of the year.”