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Saudi’s Tadawul IPO 442.53% Oversubscribed

Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)
Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)
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Saudi’s Tadawul IPO 442.53% Oversubscribed

Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)
Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)

Shares of Tadawul group will begin trading on the main market on Wednesday, Dec. 8.

The individual subscribers’ tranche of Tadawul’s initial public offering was 442.53% oversubscribed with a total demand of SR5.02 billion ($1.3 billion).

The stock exchange group was offering 10.8 million shares to individual investors, or 30% of the total offer shares at a final price of SR105.

Around 598,327 subscribers participated in the period. The subscription period started on November 30.

The IPO will provide an important strategic dimension to realize Tadawul’s expansion plans, strengthen its position globally, and align its growth objectives with the Public Investment Fund’s strategy to boost the economic transformation of Saudi Arabia.

Tadawul had earlier increased the size of the offering for retail investors to 30%, up from 10% initially, to encourage the participation of individual investors.

Subscribers will each receive a minimum of 10 shares, while those remaining will be allocated on a pro-rata basis.

The shares will be listed on the main index of the Saudi Exchange once all listing formalities are complete. Citigroup, JP Morgan Chase and SNB Capital are financial advisers and global coordinators for the IPO.

Tadawul is among the top 10 global stock markets with a market capitalization of about $2.8 trillion.

Tadawul Group has four subsidiaries that include the Saudi Exchange, a dedicated arm running the kingdom’s equity market previously known as the Saudi Stock Exchange Company; the Securities Clearing Centre Company, known as Muqassa; the Securities Depository Centre Company (Edaa); and a new subsidiary focused on applied technology services, known as Wamid.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.