The Power and Water Utility Company for Jubail and Yanbu, publicly known as Marafiq, seeks to raise up to $897 million (SAR 3.36 billion) from an initial public offering (IPO) in what is said to be the second-biggest share sale in Saudi Arabia this year. The Saudi Arabian utility set the price range for its IPO at between $10.9 (SAR 41) and $12.24 (SAR 46) a share, it said in a statement.
At the top end of the price range, the company would have a market value of $3.1 billion. Book-building for Marafiq’s IPO starts Sunday and lasts until October 14, followed by a retail offering from October 26 to 29.
The Saudi utility has assigned banks including HSBC Holdings and Riyad Capital to manage the process. Al Rajhi Bank, Banque Saudi Fransi, Riyad Bank, Saudi British Bank, and Saudi National Bank have been appointed as receiving agents. The utility originally proposed an IPO in 2017 and hired GIB Capital to assist with the possible listing and powerplant purchases.
Marafiq’s IPO would be the largest in Saudi Arabia since pharmacy chain Nahdi Medical Company raised $1.4 billion, according to Bloomberg.
Last month, Saudi-based Arabian Drilling Company garnered enough investor orders for all offered shares within hours, with the final offer price to be announced on October 11. Marafiq started its operations as a private electricity and water utility business on January 1, 2003, with initial owner equity of $666 million (SAR 2.5 billion).
Marafiq and its subsidiaries have about 4.8 gigawatts of gross power generating capacity, representing about 3.2% the kingdom’s total.
The Royal Commission for Jubail and Yanbu, Public Investment Fund (PIF), Saudi Aramco Power Co. and Saudi Basic Industries Corporation (SABIC) each own 5% or more in Marafiq. Other stockholders include seven private investors.
Saudi IPO market While Saudi stocks briefly entered a bear market last month, IPOs have continued at an accelerated pace to capitalize on continued strong demand for share sales.
In the first half of 2022, 27 new listings made it on the Saudi Exchange, according to data released by the exchange in its Listing Report. The number of listed companies on the main Saudi bourse—Tadawul—rose 6% to 215 in the second quarter of this year, compared to the year-ago period, thanks to government efforts to boost liquidity in the domestic stock market.
Saudi Arabia seeks to diversify its oil-dominated economy by selling stakes in state assets. Non-oil activities rose by 8.2% on an annual basis in the second quarter of this year and 4.5% from the first quarter.
