Lulu Retail seeks to raise up to $1.43 billion in biggest UAE IPO this year

Lulu Retail Holdings, which runs one of the Middle East's biggest hypermarket chains, is seeking to raise as much as 5.27 billion dirhams ($1.43 billion) in what is set to be the UAE's biggest initial public offering so far this year.

The conglomerate, which runs more than 240 grocery stores in the six countries in the Gulf Cooperation Council (GCC), is offering 2.582 billion shares, equal to a 25 per cent stake at an indicative price range of 1.94-2.04 dirhams per share, it said in a statement on Monday.

Founded in 1974 by Indian businessman Yusuff Ali, Lulu joins other grocery firms that have listed, such as UAE-based Spinneys this year and Saudi grocery retailer BinDawood Holding in 2020, amid a retail spending boom in the region.

Lulu Retail said that cornerstone investors that had individually committed to subscribe to the offering included Abu Dhabi Pension Fund, the Emirates International Investment Company (EEIC) and the sovereign wealth funds of Bahrain and Oman.

They will invest an overall amount of around $205 million, it added.

The price range implies a market capitalization of between $5.46 billion-$5.74 billion at the listing on the Abu Dhabi Securities Exchange, which is expected on Nov. 14, Lulu Retail said.

Two sources involved in the IPO had previously told Reuters that the offering could raise between $1.7 billion and $1.8 billion.