Lulu Retail IPO Fully Subscribed, To List On Abu Dhabi Exchange On Nov. 14

Lulu Retail Holdings Plc's initial public offering was fully subscribed in just an hour after the offer opened for investors. Demand for the listing exceeded the number of shares on offer, according to terms of the deal seen by Bloomberg News.

The retailer had announced that its initial public offering's price range was set between 1.94 and 2.04 dirhams per share, as it prepared to list on the Abu Dhabi Securities Exchange. The offering size is estimated to be between 501 crore and 527 crore dirhams. The final offer price will be disclosed on Nov. 6, with the listing anticipated on Nov. 14.

The IPO is expected to be the largest in the UAE this year, surpassing the $877 million share offering by oil services business NMDC Energy.

The IPO will see Lulu float 25% of its share capital, providing investors an opportunity to buy into the largest and fastest-growing full-line retailer in the Gulf Cooperation Council. Founded in the UAE in 1974, Lulu operates 240 stores across three formats and boasts a rapidly expanding online presence.

In a statement, Chairman Yusuff Ali MA noted Lulu's robust performance, driven by investments in digital capabilities and global sourcing. “With regional macroeconomic and demographic tailwinds behind us, we believe now is a perfect time to bring Lulu to market and further enable our ambitious growth plans,” he said.

For fiscal 2023, Lulu reported an Ebitda of $75.3 crore, with sales reaching $7,300 crore, and a compound annual growth rate of 7.4% from 2021 to 2023.

The prospectus indicates the sale of approximately 258.22 crore ordinary shares, each with a nominal value of $0.014 (equivalent to AED 0.051), to be sold by Lulu International Holdings Ltd., the company's sole shareholder.

Additionally, Lulu is targeting a total dividend payout ratio of 75% of annual distributable profits after tax, to be distributed semi-annually. The financial advisory for the IPO has been entrusted to Moelis & Company UK, while Abu Dhabi Commercial Bank, Citigroup Global Markets, Emirates NBD Capital, and HSBC Bank Middle East will serve as joint global coordinators and joint bookrunners.