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Saudi parallel market Nomu sees IPO momentum in 2023

Saudi parallel market Nomu sees IPO momentum in 2023
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By: Bedour El-Raie 

Mubasher: The Parallel Market (Nomu) of the Saudi Exchange (Tadawul) witnessed an unprecedented leap in new initial public offerings (IPOs) in 2022, welcoming 32 new companies to the market.

The number of Nomu-listed companies skyrocketed by 228.60% in 2022 to reach 46 companies, compared to 14 companies a year earlier, according to data collected by Mubasher based on official figures.

Proceeds raised through new IPOs on the Nomu parallel market totalled SAR 1.25 billion in 2022, down 33.80% from SAR 1.89 billion in 2021, whereas the number of shares offered for subscription soared by 207.80% to 26.47 million shares from 8.60 million.

The launch of the Saudi parallel market comes as part of the financial market’s development plans aimed at achieving the Kingdom’s Vision 2030, which reiterates the necessity of building an advanced, global financial market to increase financing opportunities and enhance the economic and investing capabilities of Saudi-based companies.

Last year, Nomu saw IPOs of 19 firms, up by 216.70% from 6 firms only a year earlier. In addition, 13 companies were directly listed on Nomu in 2022, representing an annual rise of 62.50%.

Ladun Investment Heads the List in Terms of Capital

The capital of the 32 companies newly listed on Nomu registered SAR 2.71 billion in 2022, compared to a total of SAR 1.26 billion in 2021 by 14 companies.

In terms of capital, Ladun Investment Company topped the list with a capital of SAR 500 million, followed by Alwasail Industrial Company and Obeikan Glass Company with SAR 250 million and SAR 240 million, respectively.

On the other hand, Edarat Communication and Information Technology Company has the lowest capital of SAR 6.30 million. 

Tibbiyah Leads in Terms of IPO Value

Arabian International Healthcare Holding Company (Tibbiyah) dominated in terms of the largest IPO value on the parallel market in 2022, with total proceeds of SAR 410 million. The company offered 5 million shares at a value of SAR 82 per share.

Saudi Top for Trading Company took second place in terms of IPO value and third in terms of the offering price, collecting some SAR 117 million by offering 880,000 shares at SAR 133 per share.

Edarat Sets Highest Offering Price

Edarat Communication topped the list in terms of the highest offering price, offering 630,000 shares at SAR 300 per share.

Coming in second place was Nofoth Food Products Company, which offered 288,000 shares at SAR 150 per share. 

Three Companies Offered Shares for Public Subscription But Not Listed Yet

A total of three companies offered their shares for public subscription on Nomu but have not been listed so far. These companies are Rayan Advanced Industrial Company, offering 2 million shares for subscription in November and the offering price has not been determined yet, Leen Alkhair Trading Company, listed under symbol 9555, offering 958,750 shares at SAR 65 per share, as well as Nofoth Food Products.

Speaking to Mubasher, Member of the Saudi Economic Association, Saad Al Thaqfaan, said that the parallel market saw new IPOs that gained momentum in 2022, particularly in the fourth quarter (Q4), a move that helped absorb the liquidity from the previous period.

He added that Nomu is a parallel equity market with lighter listing requirements and is considered an alternative platform for companies to go public, noting that investment in this market is restricted to qualified investors only and the daily fluctuation limit is up to %20±, compared to 10%± in the formal market.

Upcoming IPOs

The parallel market Nomu is set to witness more listings during 2023 whether through public subscription of shares or direct listings.

By the end of 2022, the capital market value of Nomu-listed companies totalled about SAR 35.09 billion, an increase of 84.39% when compared to SAR 19.03 billion by the end of 2021.

On the other hand, the Nomu-Parallel Market Capped Index (NomuC) retreated by 25.25% on an annual basis in 2022 to settle at 19,417.30 points, compared to 25,975.83 points.