Lulu Retail Holdings Plans Record $1.4 Billion IPO in UAE.

Lulu Retail Holdings, the operator of one of the largest hypermarket chains in the Middle East, has announced its ambitious goal to raise up to 5.27 billion dirhams (approximately $1.43 billion) in what is poised to be the largest initial public offering (IPO) in the UAE this year.

The company, which operates over 240 grocery stores across six countries in the Gulf Cooperation Council (GCC), revealed that it is offering 2.582 billion shares, representing a 25 percent stake in the business. The estimated price range for the shares is set between 1.94 and 2.04 dirhams each.

Founded in 1974 by Indian entrepreneur Yusuff Ali, Lulu is following in the footsteps of other grocery companies that have recently gone public, such as UAE’s Spinneys and Saudi Arabia’s BinDawood Holding, amidst a surge in retail spending in the region.

Lulu Retail has secured commitments from several key investors who have pledged to participate in the offering. These include the Abu Dhabi Pension Fund, Emirates International Investment Company (EEIC), and sovereign wealth funds from Bahrain and Oman. Collectively, these investors are expected to contribute around $205 million to the IPO.

The proposed price range indicates that Lulu Retail could achieve a market capitalization of between $5.46 billion and $5.74 billion upon its anticipated listing on the Abu Dhabi Securities Exchange on November 14. According to sources involved in the IPO, the offering could generate between $1.7 billion and $1.8 billion, highlighting the significant interest in Lulu Retail's public debut.

Saifee Rupawala, the CEO of Lulu Retail, stated: "We expect continued strong macroeconomic growth across our six markets, driven by favourable demographic and consumption trends, and we continue to invest in our business to drive growth and loyalty across our existing 240-store network while also opening new stores, enhancing our operational efficiencies, growing our private label range and our online and ecommerce business. We remain confident we will achieve our guidance targets in 2024 and beyond, and the offer price range reflects our desire to prioritise a supportive aftermarket performance post-listing and to welcome all investors to join in Lulu Retail’s exciting next chapter."

Lulu Retail is the second-largest grocery retailer in the UAE and the largest in Oman, Qatar, Bahrain, and Kuwait. It holds a 13.5 percent share of the offline grocery market in the GCC. The company boasts a robust omni-channel presence, combining both brick-and-mortar locations and e-commerce platforms. Lulu operates a network of 240 stores, which includes 116 hypermarkets, 102 express stores, and 22 mini markets across six GCC countries. E-commerce is available through Lulu's own website and mobile app, as well as through strategic partnerships with platforms like Amazon, HungerStation, Snoonu, and Talabat.