The United Arab Emirates and Saudi Arabia are preparing for another blockbuster year of initial public offerings in 2025, experts told Arabian Business.
This comes as the Gulf region’s two largest economies build on a year that saw Saudi Arabia list 57 companies while the UAE raised $6 billion from just seven IPOs.
The UAE’s IPO pipeline could include potential landmark deals such as national carrier Etihad Airways, online marketplace Dubizzle, hospitality firm Five Holdings, and IT company Alpha Data, though none have officially confirmed listing plans.
Saudi Arabia kicked off 2025 with the successful listing of Nice One Beauty Digital Marketing Company on Wednesday, the kingdom’s first unicorn tech company to debut on the Main Market, while United Cartons Industries and Umm Al Qura for Development have secured approvals for upcoming listings. Budget airline Flynas is awaiting regulatory approval for what could be the kingdom’s first airline IPO.
Contrasting market dynamics
The two markets are taking markedly different approaches to public offerings. The UAE has focused on fewer but larger deals, with food delivery platform Talabat and retailer Lulu Group leading seven listings that collectively raised AED22 billion ($6 billion) in 2024. Other significant listings included Abu Dhabi National Hotels Catering, NMDC Energy, Alef Education, Spinneys, and Parkin.
“Saudi Arabia is a large economy, with total GDP pegged at $1.07 trillion. Compare this with UAE’s GDP of nearly half at $505 billion,” said Vijay Valecha, chief investment officer at Century Financial.
The kingdom’s higher number of listings was partly driven by its Nomu parallel market platform, which allows smaller companies to list with reduced regulatory requirements. Its 57 IPOs in 2024 included diverse sectors from healthcare leaders like Dr. Soliman Abdul Kader Fakeeh Hospital to tech firms like WSM Digitalization & Transformation Company.
This dominance stems from strong government support, diverse sector representation, and robust retail investor demand, according to Paul Turner, executive director at Naga.com Middle East.
“The Kingdom’s strategic focus on creating a favourable environment for public listings, coupled with its stable economic indicators and positive investor sentiment, contributed to its dominant position in the region’s IPO market,” Turner said.
The UAE market showed a notable cooling from 2022, when 11 IPOs generated $13 billion in proceeds – more than double the combined total of 2023 and 2024. While Valecha suggests UAE listings could again hit the $6 billion mark in 2025, Turner believes matching the 2022 performance remains ambitious despite the promising pipeline.
Digital transformation drives listings
A key trend emerging in both markets is the increasing appetite for technology and digital-first businesses.
This shift was marked by Nice One’s landmark listing on Wednesday, which saw the beauty and care e-commerce platform raise SAR 1.21 billion ($323 million), with institutional orders exceeding SAR 169 billion. The UAE’s potential Dubizzle IPO, which could be valued between $500 million and $1 billion according to people familiar with the matter, could further reinforce this trend.
Digital-first businesses are attracting strong investor interest due to their scalability and innovation potential, while traditional companies are evaluated based on proven profitability and market position, Turner noted, adding that this reflects the broader digital transformation priorities in both markets.
“Investor appetite has shifted significantly toward digital-first businesses, particularly in sectors like AI, fintech, and e-commerce. Digital companies attract strong investor interest. However, traditional businesses that demonstrate digital transformation and strong fundamentals continue to perform well,” he said.
Digital-first businesses, he said, are valued for their scalability and innovation potential while traditional companies are evaluated based on proven profitability and market position. “This trend is particularly evident in UAE and Saudi markets, where digital transformation is a key economic priority.”
However, both markets have shown notable differences in sector focus. The UAE has leaned more towards sustainability, tech, and consumer-oriented sectors while Saudi jas maintained a balance between its “traditional strengths” in construction and energy as well as emerging sectors like e-commerce and healthcare.
Turner added that both markets are actively pursuing economic diversification through their IPO strategies, albeit with different emphases reflecting their unique priorities and economic visions.
UAE, Saudi IPO market outlook
Saudi Arabia’s Capital Market Authority has already granted several IPO approvals for the first half of 2025, though these must be acted upon within six months. While both countries maintain supportive regulatory environments, Saudi Arabia’s framework is more closely aligned with its economic diversification strategy.
The success of these markets in 2025 will depend heavily on broader economic conditions. A sharp decline in oil prices below the UAE’s fiscal break-even point of $50 per barrel could dampen market enthusiasm, Valecha warned.
“For the Gulf region, foreign investors remain strong, acting as one of the supporting anchor bases for the ongoing wave. Number-wise, over 43 per cent of registered investors on Abu Dhabi-based ADX and nearly 3,500+ qualified investors in Saudi Arabia are now foreign-domiciled,” Valecha said.
The UAE’s track record shows 61 per cent of companies listed over the past three years trading in positive territory. The Abu Dhabi Securities Market Index has risen nearly 83 per cent over five years, while Dubai’s main index has returned 57 per cent over three years, according to Century Financial data.
Expected US interest rate cuts could further boost IPO activity, given both countries’ currency pegs to the dollar, potentially leading to lower borrowing costs and increased market activity in 2025.
Source: https://www.arabianbusiness.com/markets/equities/ipo/uae-saudi-markets-eye-fresh-wave-of-blockbuster-ipos-after-record-2024
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