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Monday, February 26, 2024

Saudi car rental firm Lumi soars 30% in Riyadh IPO

Saudi car rental firm Lumi saw its shares surge by up to 30% above their listing price following a successful initial public offering (IPO) that raised $290 million. Lumi, a subsidiary of Saudi travel company Seera (formerly known as Al Tayyar Travel Group), listed 30% of its shares in the IPO.

Its shares opened at 72.6 riyals and reached as high as 85.8 riyals in early trading, surpassing its IPO price of 66 riyals, which was at the top of its indicative range.

The company’s IPO prospectus noted that Lumi is the third-largest operator in Saudi Arabia, with a market share of approximately 7% based on its fleet size in 2021. The Saudi car rental market is expected to experience a compound annual growth rate of 8.6% until 2027, reaching a market size of 9.8 billion riyals, according to research by Glasgow Research & Consulting.

Lumi’s listing is part of a resurgence in IPO activity in the Gulf region after a relatively slow start to 2023. Issuers in the Middle East and North Africa raised over $5 billion in the first half of the year, with the majority coming from Saudi Arabia and the United Arab Emirates, although this figure was 60% lower than the same period in 2022, which was a particularly strong year for Gulf IPOs.

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