Lulu Retail Holdings has initiated the subscription phase for its planned initial public offering in Abu Dhabi, aiming to secure up to 5.27 billion Emirati dirhams. This event marks a significant milestone as the largest IPO in the United Arab Emirates for the year 2024. The supermarket giant has established a price range for its shares between 1.94 dirhams and 2.04 dirhams, with the appeal of this offering projected to culminate in a market capitalization of between 20.04 billion dirhams and 21.07 billion dirhams.
The final share price will be determined on Nov. 6, following a meticulous book-building exercise. As the selling shareholder, Lulu International Holdings is offering 2.58 billion shares, equivalent to 25% of its total share capital, welcoming interest from both institutional and retail investors. The IPO has attracted significant cornerstone investors, such as the Abu Dhabi Pension Fund, Bahrain Mumtalakat, Emirates International Investment, and the Oman Investment Authority, with total commitments amounting to 753 million dirhams. Reports indicate that demand for shares exceeded the available supply, leading to a swift sell-out within just an hour of the opening. In alignment with its listing plans, Lulu intends to distribute 75% of its annual distributable profits after tax as dividends, which will be disbursed biannually.
The company anticipates issuing dividends for the six-month period ending Dec. 31, 2024, in the first half of 2025. The subscription window will close on Nov. 5, and trading of Lulu shares on the Abu Dhabi Securities Exchange is set to commence on Nov. 14. Chief Executive Officer Saifee Rupawala expressed confidence in meeting the projected targets for 2024 and beyond.
He noted, "The offer price range reflects our desire to prioritize a supportive aftermarket performance post-listing and to welcome all investors to join in Lulu Retail's exciting next chapter.".