Positive outlook for MENA IPOs going into 2024, reveals EY report

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A new report from consultancy firm EY reflects a positive outlook for the Middle East and Africa (MENA) IPO market in Q4 and 2024.

According to the EY MENA IPO Eye Q3 2023 report, MENA markets saw six initial public offerings (IPOs) during Q3 that raised $523m.

This represented a 14 per cent decrease in the number of IPOs and a 66 per cent drop in proceeds when compared to Q3 2022.

All six listings registered a gain.

In Q3 2023, there were a total of 29 IPOs year-to-date (YTD) in MENA with total proceeds of $5.8bn, marking a 6 per cent reduction in volume and a 61 per cent drop in funds raised year on year (y-o-y).

All YTD listing activity took place in the GCC region.

The report stated that despite lower levels of proceeds from MENA listings, the IPO pipeline for Q4 2023 and into 2024 remains positive, mostly driven by Saudi Arabia, where 27 companies have announced their intention to list on the Tadawul.

MENA IPOs: Q2 and H1 IPO activity

In Q2 2023, IPO activity in the MENA region net a total of $1.8bn in proceeds from 13 IPOs – a 44 per cent increase in the number of listings but an 80 per cent drop in proceeds when compared to Q2 2022.

Saudi Arabia dominated the region’s IPO activity in terms of the number of listings in Q2, with four IPOs listing on the Tadawul main market, raising $0.8bn, and seven IPOs on the Tadawul (Nomu) parallel market with proceeds of $0.1bn, EY’s MENA IPO Eye Q2 2023 report showed.

Jamjoom Pharmaceuticals Factory Company raised $336m, the highest raise on the Tadawul for the quarter, followed by First Milling Company, which raised $266.4m.

In the UAE, the Abu Dhabi Securities Exchange completed its largest IPO of the quarter with ADNOC L&S raising $769.5m.

On the Dubai Financial Market, Al Ansari Financial Services was the UAE’s first family-owned company to be listed, raising $210.4m in proceeds.

Overall, in H1 2023 the MENA IPO market registered a total of 23 IPOs (4 per cent year-on-year decrease), all of which were in the GCC with total proceeds of $5.2bn.

Brad Watson, EY MENA Strategy and Transactions leader said: “The UAE and Saudi Arabia continue to be the most active markets in the MENA region in terms of both the number and size of IPOs.  As just one example, ADNOC’s second portfolio company listing in 2023 outpaced the global markets in terms of demand.

“The MENA region continues to have strong economies and low debt; coupled with the reform and deregulation in the region, it continues to be an attractive environment for new listings.”