Lulu Group eyes Saudi listing following UAE IPO success and expansion plans

Lulu Retail Holdings, the powerhouse behind one of the Middle East's largest hypermarket chains, has announced a transformative Initial Public Offering (IPO) in the UAE, set to begin October 28, with potential aspirations for a Saudi listing on the horizon.

A day after UAE retail giant Lulu unveiled its plans for an IPO in Abu Dhabi, Chairman Yusuff Ali MA shared with Zawya that a potential listing on Saudi Arabia’s Tadawul exchange may be considered “in the long-term.”

"Our success has been built on GCC leadership’s support, and we are excited to bring new shareholders along on this journey," he stated, as reported by Zawya, echoing Lulu’s dedication to building a pan-GCC retail legacy.

The UAE IPO, expected to be the largest this year, will further position Lulu to capitalize on the GCC's robust retail demand and reinforce the Abu Dhabi Securities Exchange’s (ADX) prominence as a key regional trading hub.

IPO financial structure and growth strategy

The UAE IPO subscription will run from October 28 to November 5, with ADX trading slated for November 14, according to Zawya. Funds raised are expected to bolster Lulu’s expansion efforts and support debt management as the company scales its regional presence.

With an impressive portfolio of over 240 stores across the Gulf Cooperation Council (GCC) nations, Lulu's upcoming listing seeks to attract investors with strong dividends and stability.

As per IPO documents, the company has committed to a 75% dividend payout ratio of annual distributable profits after tax, underscoring its commitment to rewarding shareholders.

Market Position and Financial Performance

The hypermarket giant reported $7.3 billion in revenue for 2023, marking a 5.6% year-over-year increase, bolstered by sales growth in existing stores, new openings, and expanded online sales.

Lulu’s EBITDA for the first half of 2024 reached $391 million, a 4.3% rise compared to the previous year, underscoring a resilient performance in a competitive market.

Lulu has solidified its status as the GCC’s largest full-line retailer, with a sprawling 1.3 million square meters of selling space—three times that of its closest listed competitors.

Its 21 distribution centers support over 600,000 daily shoppers across hypermarkets, express stores, and mini-markets, with products sourced from 85 countries.

As the second-largest grocery retailer in the UAE and the market leader in Oman, Qatar, Bahrain, and Kuwait, Lulu’s expansion into Saudi Arabia has further cemented its dominance in the region.