Saudi grocery chain BinDawood sets IPO price at 96 riyals a share

Saudi Arabia’s third-biggest grocery chain BinDawood Holding Company priced its initial public offering at 96 riyals ($25.59) per share, the company said on Wednesday.

The company, which owns the Danube and BinDawood supermarket brands, said the book-building process was more than 48-times oversubscribed by institutional investors, generating an order book of 106.9 billion riyals.

It will raise about 2.2bn riyals from the sale of a 20 per cent stake, implying a value of almost 11bn riyals.

Subscriptions came from public funds, private funds and discretionary portfolios, non-Saudi Arabian investors and other investors, including government institutions, private companies and financial institutions.

Provisionally, 100 per cent of the shares have been allocated to institutional investors, although this could be reduced to 90 per cent, depending on demand from retail investors. The subscription period for individual investors runs from October 8 to October 12.

“I am very pleased with the exceptionally strong demand we have witnessed for BinDawood Holding shares by institutional investors,” chief executive Ahmad BinDawood said.

“We believe it reflects their confidence in our ability to successfully execute our strategy to become the leading grocery retail brand in Saudi Arabia.”

BinDawood Holding had 73 shops – 51 hypermarkets and 22 supermarkets – as of December 31, 2019.

Its first-half net profit increased by 82 per cent from last year while revenue rose by 22 per cent during the same period.

Significant shareholders in the company include the BinDawood family and Bahrain-based Investcorp, which acquired a stake in 2015.

“Research tells us that the modern grocery retail market in Saudi Arabia was valued at 57bn riyals  in 2019 and is set to grow at 5 per cent per year through to 2024. The IPO will give our new institutional and retail investors a chance to be part of this growth for the long term,” Mr BinDawood, said.

The company announced its plans to list shares on Tadawul stock exchange in August.