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MENA IPO proceeds to gather momentum in Q2 2023, says report

New report reveals that Saudi Arabia and UAE are driving the most IPO activity in the MENA region.

MENA IPO proceeds to gather momentum in Q2 2023, says report
[Source photo: Anvita Gupta/Fast Company Middle East]

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A slowdown in the Middle East and North Africa’s initial public offering (IPO) continued in the first quarter of 2023 as companies waited out the effects of volatile stock markets, higher interest rates and inflation, and uncertainty around the banking crisis. The region’s IPO market saw a 4% decrease YoY, with the IPOs from the GCC generating $5.2 billion.

That’s according to an EY report

However, the region has a promising pipeline for the rest of the year, particularly from Saudi Arabia, which added that 23 Saudi companies have announced their listing plans on the Tadawul for H2 2023.

Two companies in Egypt intend to list, indicating a solid pipeline of IPOs in the remainder of the year.

“The second quarter of 2023 confirmed that MENA IPOs are not experiencing the downward trend witnessed globally. The UAE and Saudi Arabia continue to be the most active markets in the MENA region in terms of both the number and size of IPOs,” says Brad Watson, EY MENA IPO and transaction leader.

Saudi Arabia leads in the IPO activity in the region, with 11 of the 13 listings coming from the kingdom in Q2 2023.

The report further stated that the region maintained its listing with $1.8 billion in proceeds from 13 IPOs in the second quarter of 2023. However, despite the 44% increase in IPOs, total proceeds in Q2 2023 decreased by 80% compared to Q2 2022.

In the UAE, the biggest IPO was carried out by the Abu Dhabi Securities Exchange (ADX) with Abu Dhabi National Oil Co, amassing $769.5 million. The issuance oversubscribed by 163 times, making it the most demanded IPO internationally in 2023. Al Ansari Financial Services was the first family-owned business in the UAE to list on the Dubai Financial Market, totaling $210.4 million in proceeds.

The Dubai Financial Market launched the IPO accelerator program in H1 2023 to support family businesses and large private companies on their listing journeys.

Gregory Hughes, EY MENA IPO and transaction diligence leader, says, “The MENA IPO pipeline for H2 2023 and 2024 remains very healthy with several IPOs already announced in KSA and multiple processes ongoing across the broader region, with further transactions planned in the UAE, Oman, Qatar, and Kuwait.”

“We see planned IPO activity across different sectors and from a combination of family business, state-backed enterprise, and private equity stakeholders.”

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