Lulu Retail Holdings, which runs one of the Middle East's biggest hypermarket chains, said on Monday it aims to raise up to 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 six Gulf countries, is offering 2.582 billion shares, equal to a 25% stake at an indicative price range of 1.94-2.04 dirhams per share, it said in a statement.
Books were covered multiple times within hours of opening as demand from investors exceeded the overall deal size, according to a person familiar with the matter who asked not to be identified.
Two sources involved in the IPO had previously told Reuters the offering could raise between $1.7 billion and $1.8 billion.
Founded in 1974 by Indian businessman Yusuff Ali, Lulu joins other grocery firms that have listed, such as United Arab Emirates-based Spinneys SPINNEYS.DU this year and Saudi grocery retailer BinDawood Holding 4161.SE in 2020, amid a retail spending boom in the region.
Lulu Retail said 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 about $205 million in total, it added.
The price range implies a market capitalisation 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.
The Gulf region accounted for the vast majority of the 30 IPOs that took place in the Middle East and North Africa region over the first nine months of the year, which raised an overall $5 billion, according to LSEG data.
