MENA IPO market surges with 48 offerings raising $10.7B in 2023: Report

The Middle East and North Africa (MENA) region has underscored its growing importance as a global investment hub. In 2023, 48 MENA IPOs raised $10.7 billion, with five listings in energy and logistics sectors contributing 58% to the total IPO proceeds, according to EY MENA IPO Eye Q4 2023 report.

The market saw 19 offerings, raising $4.9 billion, down 5% and 32%, respectively, from Q4 2022. Similarly, 48 IPOs raised $10.7 billion, a decrease of 51% in terms of funds raised year-on-year.

Eleven out of 19 IPOs in the fourth quarter of 2023 showed an increase in the share price on the first day, and 26 out of 48 IPOs showed a positive return compared to the listing price. Armah Sports Company showed the highest increase at 72%, the report highlighted.

"The MENA IPO market delivered a healthy number of IPOs across various sectors in 2023, despite the subdued global economic backdrop and the rising geopolitical tensions in the Middle East. Several reputable large state-owned companies listed in 2023," said Gregory Hughes, EY MENA IPO Leader.

"As expected, 2024 started positively with the MBC listing, Avalon Pharma and the announcements of several IPOs on the MENA markets including large private and state-owned names," he added.

The number of IPOs last year was 6% lower than in 2022, and the proceeds were 51% lower. The number of IPOs in 2022, including Americana, Luberef and Arabian Drilling Company, contributed to the decline.

A total of 29 companies from various sectors have announced plans to float their public issue in 2024, with KSA and UAE on top in terms of expected volume.

KSA and UAE lead the way

Despite the challenging geopolitical environment in MENA, the outlook for MENA IPOs in 2024 remains positive. MBC Group and Avalon Pharma are among 29 private companies and 26 funds planning to list on MENA exchanges. 

According to the report, the Kingdom of Saudi Arabia (KSA) led the GCC market with 37 initial public offerings in 2023, of which 29 were on the Tadawul Nomu Stock exchange and eight were on the Tadawul. With two companies listing, 15 companies announcing IPOs and four companies mandating the process, this trend is expected to continue in 2024.

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KSA, with 14 out of 19 IPOs, had the highest number of listings in the fourth quarter of 2023. The remaining 12 IPOs took place on the Nomu market, with ADES Holding Company and SAL Saudi Logistics Services Company raising the largest amounts. Energy (36%), transportation (29%), and healthcare (10%) were the most popular sectors for IPO funds raised in KSA.

Meanwhile, the UAE saw eight initial public offerings (IPO) during 2023, six to the Abu Dhabi Securities Exchange (ADX), and two to the DFM. At least five companies are expected to go public in 2024, and the momentum is expected to continue, it said.

The ADX welcomed three listings in Q4, including Pure Health Holding PJSC, Investcorp Capital Plc, and Phoenix Group PLC, which raised a combined $1.8 billion. In transportation, Dubai Taxi Company PJSC is listed for $315 million.

Pure Health Holding and Phoenix Group PLC accepted local investors, while Investcorp Capital Plc and Dubai Taxi Company welcomed both local and international investors for their IPOs.