DUBAI: Saudi Arabia’s Derayah Financial will offer investors a 20% stake via an initial public offering, it said on Thursday, the first firm to launch a planned flotation on Riyadh’s main market this year.
The company is planning to sell 49.94 million existing shares, it said in a regulatory filing, with the price to be determined at the end of an unspecified book-building period.
CEO Mohammed AlShammasi told Reuters that the firm believed it would set a benchmark for more fintech listings in Saudi Arabia.
The brokerage is looking to capitalise on the “massive” growth opportunities offered by Saudi Arabia, AlShammasi said, citing stock exchange initiatives to enhance trading infrastructure and opportunities to target more institutional clients and expand its asset management business.
Saudi Arabia’s bourse is the Gulf Arab region’s largest, with average traded value of over $1 billion. The market opened up to foreign investors in 2015.
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Founded in 2009, Derayah provides brokerage and trading services, which account for over 60% of its total revenue, as well as asset and wealth management, with 15.1 billion riyals ($4.03 billion) in assets under management as of the end of June.
A run of IPOs in the Gulf has been driven in part by local governments’ economic diversification strategies and listings by private groups and family businesses.
Financial services firms including Rasan Information Technology and Yaqeen Capital were among those making their Saudi market debut last year.
Others like the investment banking arm of Riyad Bank , one of the Kingdom’s biggest lenders, could follow this year.
“It’s no secret…that there is an increasing share of international investors participating within the capital market in Saudi Arabia,” AlShammasi said, pointing to demand from Asian and Western investors.
Derayah posted a net profit of 228 million riyals ($60.80 million) in the first half of 2024, up 70% from the same period a year earlier, it said on Thursday.
It appointed HSBC Saudi Arabia as sole financial adviser, bookrunner, global coordinator, lead manager and underwriter for the IPO.
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