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The number of companies going public in the MENA region in the first half of 2022 increased by 500% year-on-year, with 24 IPOs raising $13.5 billion – a 2,952% increase in value compared to the same period in 2021, according to a report.
In the second quarter of 2022, there were nine IPOs in the MENA region, raising approximately $9 billion. The latest EY MENA IPO Eye report said that while the number of IPOs decreased by 40% compared to the first quarter of 2022, funds raised increased by 133%.
Globally, 630 IPOs raised $95.4 billion in proceeds in the first half of 2022, a sharp drop of 46% and 58% in the number of IPOs and proceeds raised compared to the first half of 2021. Increased volatility due to geopolitical tensions and macroeconomic factors, falling valuations and post-IPO share price underperformance have led to the delay of many global IPOs in the first half of 2022.
Brad Watson, EY MENA Strategy and Transactions Leader, said: “IPO activity in the MENA region continues to challenge global trends and remains a bright spot in a challenging market. Deal volume and value in the second quarter of the year Investors remain interested in growth, earnings and diversification, confirming that several MENA-listed companies from multiple industries were oversubscribed, which is encouraging for companies looking to go public in the second half of the year .”
UAE witnesses largest IPO to date
In the UAE, the Dubai Electricity and Water Authority (DEWA) raised more than $6 billion, making it the largest IPO in EMEA since 2019 and the largest IPO in the UAE to date. The order was oversubscribed 37 times. Borouge was the second-largest IPO in the first half of 2022, raising $2 billion and being nearly 42 times oversubscribed. TECOM Group raised $454 million, more than 21 times oversubscribed.
ADC Acquisition Corp has become the first special purpose acquisition company (SPAC) to list in the MENA region, raising $99.9 million on the Abu Dhabi Stock Exchange (ADX). ADC was formed by ADQ through its Alpha Oryx dedicated vehicle and Chimera Investment as a SPAC to identify and acquire one or more businesses.
Saudi Arabia leads in number of IPOs with 5 IPOs
In Saudi Arabia, the Saudi Home Loans Company listed on Tadawul in Q2 2022, raising $160 million, and the book was 50 times oversubscribed. Retal Urban Development Company raises $384 million with institutional order book oversubscribed by 62 times.
Nomu-Parallel Market witnessed three IPOs in the second quarter of 2022, raising a total of $40.8 million. Proceeds came from the listings of Arabian Foods and Dairy Factory, Ladun Investments and Amwj International.
Six direct listings in GCC in Q2 2022
Six direct listings were also reported in the second quarter of 2022, with a total of 12 announced in the first half.
There are three direct listings on the Nomu-Parallel marketplace in the second quarter of 2022. They are Naseej of Communications and Information Technology, Aqaseem Plant of Chemicals and Plastics and National Environmental Recycling.
Elsewhere, Ali Alghanim and Sons Automotive Company raised $323 million in new funding through a private placement ahead of its listing on the Kuwait Stock Exchange. The private placement was oversubscribed by about 11 times.
On ADX, GFH Financial Group completed its fourth regional listing, with its shares listed on the Bahrain Exchange, Kuwait Exchange and Dubai Financial Market (DFM). In April 2022, ADX rebranded its secondary market as Growth Market, and Invictus Investment Company became the 13th company to list on Growth Market in the second quarter of 2022.
Gregory Hughes, EY MENA IPO and deal research leader, said: “The second quarter of 2022 continued the momentum of the first quarter, with Saudi Arabia and the UAE leading IPO activity in the MENA region. IPO candidates from Saudi Arabia and the UAE, as well as quieter IPO markets such as Oman, Qatar and Kuwait, are still expected to list in the future.”
“As part of their IPO readiness assessment, companies are paying greater attention to the impact of the changing regulatory environment, particularly around environmental, social and governance (ESG) requirements. ESG will continue to be a key theme for investors and potential candidates. With continued climate change and increased constraints on energy supplies, companies that incorporate ESG into their core business values and operations should attract more investors and higher valuations.”
Global IPO market continues to slow in Q2 2022
Globally, IPO activity slowed sharply in the second quarter of 2022 due to heightened market volatility, causing many IPOs to be delayed. While overall IPO activity declined in most major markets, both the Middle East and India had a strong quarter.
Overall, heightened volatility due to geopolitical tensions and macroeconomic factors, lower valuations and poor post-IPO share price performance have all contributed to a sharp drop in IPO activity from a record year in 2021. Global activity in the first half of 2022 was almost halved compared to the first half of 2021, with the Americas market falling the most. However, Asia-Pacific markets have fared relatively well and benefited from the two largest global IPOs so far this year, the report said. – arab trade news agency
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