Saudi pharmacy chain seeks $1.3bn in top IPO since Aramco

Saudi Arabia’s largest pharmacy retail chain plans to seek about $1.3bn in an initial public offering in the next few months in what could be the largest listing in the kingdom since state oil giant Saudi Aramco went public in 2019, according to people familiar with the matter.

Al Nahdi Medical Co. has appointed the local unit of HSBC Holdings and the investment banking arm of Saudi National Bank to manage the sale of a 30 per cent stake on the Saudi stock market, the people said, asking not to be identified because the information is private.

The company is considering seeking a valuation of around SAR16bn ($4.3bn) in the IPO, the people said. Deliberations are ongoing, and details of the potential offering haven’t been finalised, the people said.

The firm, half owned by Jeddah-based investment firm Sedco Holding, received regulatory approval for the listing in December. Al Nahdi, SNB Capital and HSBC declined to comment.

The offering adds to signs that demand for new share offerings is carrying into this year after a boom period across the Middle East in 2021. The most recent wave of listings has already seen a digital security firm owned by Saudi Arabia’s wealth fund draw about $57bn in orders from institutional investors in an offering that sought to raise up to $820m.

ACWA Power International’s $1.2bn IPO last year was the largest since Aramco raised almost $30bn in the world’s biggest ever stock offering.

Founded in 1986, Al Nahdi has a network of pharmacies with 1,151 outlets across 144 cities. It also has another pharmacy in the UAE. Sedco is the investment firm of the Bin Mahfouz family, one of the country’s biggest merchants that was behind the establishment of Saudi Arabia’s biggest bank.

A successful listing of Al Nahdi would represent a rare IPO by a pharmacy chain and would rank it among the largest in the industry.

Walgreens Boots Alliance is currently in the process of selling off its Boots drugstores unit in a deal that could value the chain at up to $9.6bn, people familiar told Bloomberg in January. Indian pharmacy chain MedPlus Health Services Ltd. raised almost INR14bn  ($187m) in an IPO last month.