Saudi Arabia’s IPO market has long been dominated by the Saudi government privatisations such as the mega listings of Saudi Aramco [Tadawul:2222] and Saudi National Bank [TADAWUL: 1180].

But over the last three years, the market has evolved with local private issuers, often mid-cap companies now conducting IPOs.  Over the last three years, the number of companies listing on the Tadawul has soared, with 38 IPOs priced in 2022, 35 in 2023, and 31 in 2024 YTD.

These figures are in stark contrast to years before, with the next best figure over the last twelve years being 2017, with 18 deals.

“The Saudi IPO market has been consistently active in recent times, but we’re seeing fewer big government deals and more private issuers coming to market,” an ECM lawyer said. “Saudi remains active in the region because of high localised investor demand and keen international investors looking for exposure.”

A slew of mid-cap IPOs are expected to come to market before the end of the year, with around ten new listings to be launched before the year-end, with a focus on sectors such as healthcare, fintech, and industrials, according to a source close to several Saudi listings.

Saudi IPOs, either announced or expected, include Tamkeen Human Resource Company, United International Holding Company, Ejada, and Dajam Steel.

“The market is characterized by strong liquidity, and most IPOs have seen significant demand, being many times oversubscribed. This trend reflects continued investor confidence and the robust appetite for new offerings in the Saudi market,” said the source.

The rise of the mid-cap and non-state-related IPO market in Saudi is the culmination of a huge push by the country’s regulator the Capital Market Authority (CMA) to increase issuance by firms in that bracket.

While the IPO deal count has surged, deal volumes fell year-on-year in 2023, to USD 13.9bn, down from USD 35.7bn the year before.  In 2024 YTD, volumes stand at USD 11.8bn so far, with Dr Soliman Abdel Kdr Fakh Hsptl Co [TADAWUL:4017], and Modern Mills Co [TADAWUL:2284], leading the way.

The lower volumes are to be expected as mega state-privatisations take a back seat to smaller private issuers.

There is also growth potential for Saudi beyond its mid-cap champions.

In 2025, the deal count is likely to remain strong as more mid-cap firms look to list, with 18 companies in the initial validation phase. But this includes dual listing possibilities for five foreign companies outside the GCC, primarily in the energy and natural resources sectors, hoping to list in Saudi, said a second source working on a number of Saudi deals.

“The exchange has seen significant interest from China, particularly from the Shenzhen, Shanghai, and Hong Kong stock exchanges, with the first Chinese listing expected soon,” this source added.