Arabian Mills Launches IPO Price Range and Book Building Process

Arabian Mills for Food Products Company, a prominent flour milling enterprise in Saudi Arabia, has set the price range for its Initial Public Offering (IPO) between SAR 62 and SAR 66 per share. This offering is expected to raise between SAR 954 million and SAR 1.02 billion (approximately $255 million to $271 million), establishing a market capitalization ranging from SAR 3.18 billion to SAR 3.39 billion ($848 million to $903 million).

The institutional book-building period, a crucial phase in determining the final price of the shares, commenced on September 1 and will continue until September 5. This process is pivotal as it allows institutional investors to bid within the price range, influencing the final offer price of the shares. The IPO comprises a sale of 15,394,502 ordinary shares, representing 30% of the company’s total share capital. The sale is facilitated by the company’s major shareholders, including Abdulaziz Al Ajlan Sons for Commercial and Real Estate Investments, Ajlan & Bros, Sulaiman Abdulaziz Al-Rajhi International Company, and the National Agricultural Development Company (NADEC).

Once the IPO concludes, the proceeds will be distributed among the selling shareholders, with no funds going directly to the company. The shares are set to be listed on the Saudi Exchange's Main Market post-IPO. HSBC Saudi Arabia has been appointed as the sole financial advisor, global coordinator, bookrunner, underwriter, and lead manager for the offering, with Alrajhi Bank, Saudi Awwal Bank (SAB), and Banque Saudi Fransi (BSF) acting as receiving agents.

Arabian Mills has been a key player in Saudi Arabia’s flour milling sector, known for its extensive product portfolio and strong market presence. The IPO is anticipated to bolster the company's market standing and attract significant interest from institutional investors looking to tap into the Kingdom’s growing food products sector.

This IPO is part of Saudi Arabia's broader economic strategy to diversify its economy and increase private sector participation through the capital markets. The outcome of this offering could set a precedent for future listings in the sector, reflecting investor confidence in the region's food industry.

Arabian Mills’ decision to go public aligns with the Kingdom’s Vision 2030 initiative, which seeks to promote local industries and reduce dependency on oil revenues. The move also underscores the increasing trend of family-owned businesses in the region seeking public listings to enhance their corporate governance and access to capital.

As the book-building phase progresses, market analysts and investors will closely watch how this IPO unfolds, given its potential impact on the Saudi stock market and the broader Middle Eastern economy. The final offer price, expected to be announced after the completion of the book-building process, will provide further insights into investor sentiment toward the region's food and agriculture sectors.

Arabian Mills’ IPO is poised to be one of the most significant offerings in Saudi Arabia this year, with its success likely influencing upcoming listings and investment strategies within the Kingdom.