Lulu Retail on Monday set an offer price between Dh1.94 and Dh2.04 per share for its initial public offering (IPO), implying a market capitalization of Dh20.04 billion and Dh21.07 billion.
Assuming all the shares offered by the Abu Dhabi-based retail giant are sold, the size of the offering will be between Dh5.01 billion and Dh5.27 billion, making it the biggest IPO.
The subscription for the UAE’s biggest IPO opened today (Monday) and will run till Tuesday, November 5, for all the investors.
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The final offer price will be determined through a book building process and is expected to be announced on Wednesday, November 6, 2024.
Lulu Retail Holdings, the largest and fastest-growing pan-GCC full-line retailer, will sell over 2.582 billion (2,582,226,338) shares, representing 25 per cent of the total issued shares.
“The price has been finalised based on the feedback of the investors globally, regionally and locally. I think this will give a massive opportunity for the wider segment of market, including our customers and anyone else who has known brand Lulu, to be part of our growth story,” said Saifee Rupawala, chief executive officer of Lulu Retail.
Saifee Rupawala
Cornerstone investors
Lulu Retail also entered into cornerstone investor agreements with Abu Dhabi Pension Fund (ADPF), Bahrain Mumtalakat Holding Company, Emirates International Investment Company (EIIC), and Oman Investment Authority. The aggregate commitments of all the cornerstone investors is approximately Dh753 million, with EIIC committed to subscribe to $100 million (Dh367 million). The cornerstone investors’ shares are subject to a 180-day lock-up arrangement after the listing.
“Our offering presents a unique opportunity for local and international investors to participate in the growth of the largest pan-GCC retailer by market share and the fastest-growing player of scale in Saudi Arabia. We expect continued strong macroeconomic growth across our six markets driven by favourable demographic and consumption trends. We continue to invest in our business to drive growth and loyalty across our existing 240-store network while also opening new stores, enhancing our operational efficiencies, growing our private label range and our online and e-commerce business,” said Rupawala.
“We remain confident we will achieve our guidance targets in 2024 and beyond, and the offer price range reflects our desire to prioritise a supportive aftermarket performance post-listing and to welcome all investors to join in Lulu Retail’s exciting next chapter,” he said.
Minimum Dh5,000 subscription
Under the first tranche for individual subscribers and eligible employees, 258.222 million shares will be up for subscription, representing 10 per cent of the offer share. Each subscriber – other than eligible employees – will have a minimum guaranteed allocation of 1,000 shares and each eligible employee will have a minimum guaranteed allocation of 2,000 shares.
The minimum application size for first tranche subscribers is Dh5,000 with any additional application to be made in increments of Dh1,000. There is no maximum application size for this tranche.
Individual investors can subscribe through Abu Dhabi Commercial Bank, First Abu Dhabi, Dubai Islamic Bank, Emirates Islamic Bank, Mashreq and Emirates NBD.
Under the second tranche for institutional investors, Lulu Retail aims to offload 2,298,181,441 shares, representing 89 per cent of the off share.
The minimum application size for the second tranche subscribers is Dh5 million. There is no maximum application size in this tranche.
Over 25.822 million shares will be sold through the third tranche for senior executives, representing one per cent of the offer share. The minimum application size for third tranche subscribers is Dh50,000 with any additional application to be made in increments of Dh1,000. There is no maximum application size for subscribers in this tranche also.
How to subscribe?
Lulu Retailer IPO can be subscribed by GCC residents as well as Indian investors, subject to the laws of those countries.
Retail investors can approach stock brokers in the UAE and retailers receiving banks for subscriptions. There are almost 20 banks in the syndicate where people can subscribe. The basic requirement for subscribing IPOs in UAE is to have a National Investor Number (NIN), which can be obtained through brokerages.
Investors outside the UAE can obtain information and guidelines from the websites of brokerages in the UAE and approach them to know about the documents and procedures on how to get NIN and subscribe. Brokerages will perform their KYC (know your customer) before applying for the NIN and subscription.
In addition, there is also a detailed FAQ available online for interested investors.
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