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Saudi Arabia’s First Milling Co. set the price for its initial public offering at the top of the marketed range after being swamped by institutional orders, the latest sign of a revival in the kingdom’s IPO market. Big investors placed orders worth 68.8 billion riyals ($18 billion), almost 69 times more than was available to them, according to a statement.
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At a price of 60 riyals a share, the IPO will raise 999 million riyals for selling shareholders, valuing the company at 3.33 billion riyals. First Milling will take orders from retail buyers from June 6 to June 7.The IPO is set to be the second biggest in Saudi Arabia this year, after generic drugmaker Jamjoom Pharmaceuticals Factory Co.’s $336 million offering.
Why it matters
Saudi IPOs are returning to life after their slowest start since 2014 amid concerns over falling oil prices and a global economic slowdown. The benchmark Tadawul All Share Index has rebounded about 12% from a March low, helping boost investor sentiment. Just $72 million worth of IPOs have started trading in the kingdom so far this year, a sharp drop from the almost $4 billion seen a year ago, according to data compiled by Bloomberg.
