Lulu Retail Holdings expects to raise $1.43 billion from its Abu Dhabi IPO

New Delhi

Lulu Retail Holdings Plc's Abu Dhabi initial public offering (IPO) is expected to raise $1.43 billion at the top end of the set range, making it UAE's biggest listing of the year, reported Bloomberg on Monday, November 4.

The public offer is anticipated to be priced at 2.04 dirhams ($0.56) per share, based on the terms of the agreement. According to the report, at the top end of the IPO range of 1.94 dirhams, Lulu Retail Holdings's market capitalisation will reach 21.1 billion dirhams.

The shares offered by the retailer have attracted significant demand since the books opened for the deal last week, making this IPO the biggest public listing of the year, surpassing NMDC Energy’s $877 million share offer.

Through this IPO, Lulu International Holdings plans to sell a 25 per cent stake, equivalent to 2.58 billion shares in the firm. The final price for the public offer is expected to be announced on November 6, and the shares are scheduled to start trading on November 14.

Basic details about Lulu Retail

As per the official website of the organization, Lulu Retail is the largest full-line retailer in the GCC, leading in sales, store count, and retail space. With 240 stores across six GCC countries, including 116 hypermarkets, 102 Express stores, and 22 Mini Markets, Lulu also has a strong omni-channel presence through its website and mobile app, along with partners like Amazon, HungerStation, Snoonu, and Talabat.

Further, the retailer offers a diverse product range sourced from 85 countries, ensuring year-round availability of quality items. Lulu Retail also supports food security initiatives, mitigating supply risks while providing customers with a compelling and balanced product offering. The company reported a $192 million profit last year and aims to maintain a dividend payout ratio of 75 per cent, as per the agency report.

The profit margins for the company are estimated to reach 5 per cent in the medium term, which is higher compared to the 2.6 per cent levels in 2023, the chief executive officer (CEO) told Bloomberg. 

Lulu Group was founded by Indian entrepreneur Yusuff Ali. The company plans to open nearly 90 stores across the Gulf Cooperation Council (GCC) countries in the next five years, focusing on Saudi Arabia and the UAE as its main expansion markets, per the report.

Abu Dhabi Commercial Bank PJSC, Citigroup Inc, Emirates NBD Capital, and HSBC Holdings Plc are the joint global coordinators on the sale, and Moelis & Co is the advisor on the deal. Market participants and investors will closely follow these developments related to the company and will take informed investment decisions based on the same.