Saudi Hospital IPO Draws $91B, Oversubscribed by 119x

Key Takeaway

• Dr. Soliman Abdul Kader Fakeeh Hospital's IPO, drawing $91 billion in orders and oversubscribed by 119 times, marks the largest Saudi listing this year.
• The Saudi stock market is diversifying with technology firms like Rasan Information Technology aiming to raise up to $224 million, indicating a shift beyond traditional sectors.
• Strong investor interest in various sectors showcases the vibrancy of the Saudi IPO market, with significant economic growth and diversification efforts.

Surge in Saudi IPOs

Investors have shown significant interest in the Saudi stock market, with Dr. Soliman Abdul Kader Fakeeh Hospital's IPO attracting $91 billion in orders, making it the kingdom's largest listing of the year. The offering was oversubscribed by 119 times, with institutional investors leading the charge. This enthusiasm is part of a broader trend in the Saudi market, where recent weeks have seen a flurry of IPO announcements. The Saudi stock exchange's CEO anticipates this momentum to continue, with over 10 companies lined up for public offerings. Among the cornerstone investors for Fakeeh Care Group's IPO were the Abu Dhabi Investment Authority and Olayan Saudi Investment Co., marking a significant milestone as it's the first time the Abu Dhabi wealth fund has participated as a cornerstone investor in a Saudi IPO.

Fintech and Technology Sector Growth

The Saudi stock market is diversifying beyond its traditional focus on banks and industrial companies, with technology firms like Rasan Information Technology Co. entering the fray. Rasan's IPO aims to raise up to $224 million, setting a price range of 35 to 37 riyals per share. This move is part of a broader push to include more technology firms in the market, as evidenced by the successful IPOs of companies like Jahez, a food delivery firm, in late 2021. Rasan, the kingdom's largest insurance aggregator, reported revenues of 256 million riyals and an income of 46 million riyals in 2023, highlighting the growing financial strength of tech companies in the region.

Investor Appetite for IPOs

The Saudi IPO market has been vibrant, with offerings from various sectors receiving strong investor interest. For instance, the IPO of water treatment firm Miahona was covered 170 times by institutional investors, and the flour milling company Modern Mills Co. saw its stock rise more than 11% since listing. This trend underscores a robust appetite for new share sales among investors, buoyed by the kingdom's economic growth and the stock exchange's efforts to attract a diverse range of companies. The successful oversubscription of recent IPOs, including that of Dr. Soliman Abdul Kader Fakeeh Hospital, further demonstrates the market's dynamism and investor confidence in Saudi Arabia's economic prospects.