Lulu Retail Holdings Unveils IPO Price Range And Subscription Timeline For Investors

Lulu Retail Holdings PLC has revealed the price range for its share sale and the commencement of its IPO subscription on the Abu Dhabi Securities Exchange (ADX). The subscription period begins today and will conclude on 5th November 2024 for UAE Retail Offering, Eligible Senior Executives, and Professional Investors. The offer price is set between AED1.94 and AED2.04 per share.

Assuming all shares are sold, the offering size will range from AED5.01 billion ($1.36 billion) to AED5.27 billion ($1.43 billion). Lulu Retail's market capitalisation is expected to be between AED20.04 billion ($5.46 billion) and AED21.07 billion ($5.74 billion) based on this price range.

The company plans to sell 2,582,226,338 ordinary shares, which represent 25% of its total issued shares. These shares are being sold by Lulu International Holdings Limited, the sole shareholder. The final offer price will be determined through a book-building process and announced on 6th November 2024.

Lulu Retail aims for a dividend payout ratio of 75% of annual distributable profits after tax, paid semi-annually according to its dividend policy. A dividend for the six months ending 31st December 2024 is targeted for payment in the first half of 2025.

On 28th October 2024, Lulu Retail and its selling shareholder entered into agreements with several cornerstone investors: Abu Dhabi Pension Fund, Bahrain Mumtalakat Holding Company Co. B.S.C., Emirates International Investment Company LLC (EIIC), and Oman Investment Authority. Each investor has committed to purchasing sale shares at the offer price in the qualified investor offering.

The total commitments from these cornerstone investors amount to approximately AED753 million ($205 million). EIIC alone has pledged $100 million towards this investment. The shares acquired by these investors will be subject to a lock-up arrangement lasting 180 days post-listing.

CEO's Perspective on Growth

Saifee Rupawala, CEO of Lulu Retail, stated that their offering provides a unique chance for both local and international investors to engage in the growth of the largest pan-GCC retailer by market share and the fastest-growing player in Saudi Arabia. "More than 600,000 people shop with Lulu every day across our multiple store formats," he noted.

Rupawala also highlighted expectations of strong macroeconomic growth across their six markets due to favourable demographic trends. He emphasised ongoing investments in expanding their existing network of 240 stores while opening new ones, enhancing operational efficiencies, growing their private label range, and boosting online business.

Upcoming Trading Admission

The admission of Lulu Retail's shares for trading on ADX is scheduled for 14th November 2024. This marks a significant step in broadening their investor base and enhancing market presence.

With inputs from WAM