Saudi Arabia extends IPO lead with $1.9bn in Q2 listings, EY says

12/08/2025 02:11 AST

Saudi Arabia dominated the Middle East and North Africa initial public offering market in the second quarter of the year, raising $1.9 billion from 13 listings, as investor demand stayed resilient despite global uncertainty, EY said.

This accounted to 76 percent of the region's total proceeds, which saw 14 IPOs in the second quarter that generated $2.5 billion, a 4 percent increase from the previous quarter, EY's MENA IPO Eye report showed.

The largest was budget carrier flynas's debut on the Saudi main market, marking 44 percent of the quarter's proceeds. Specialized Medical Co. followed with $500 million, while United Carton Industries Co. raised $160 million.

Saudi Arabia's domination in IPO activities in the MENA region comes amid broader financial reforms by the Kingdom's Capital Markets Authority, which introduced new frameworks, including regulations for special purpose acquisition companies to expand funding avenues and enhance private-sector participation.

"Saudi Arabia continues to set the pace for IPO activity in the MENA region, attracting strong interest across multiple sectors," said Gregory Hughes, MENA EY-Parthenon IPO leader.

"At the same time, landmark transactions in the UAE show how regional exchanges are evolving to meet the needs of a broadening investor base. This diversity, combined with continued enhancements in market governance, is key to sustaining long-term growth," he added.

In the UAE, the Dubai Financial Market welcomed Dubai Residential REIT, which raised $584 million. The deal was the Gulf Cooperation Council's largest real estate investment trust by market capitalization and the first pure-play residential leasing REIT in the region.

"The second quarter of this year has reinforced the MENA region's position as a resilient and dynamic IPO market. In spite of investors practicing caution, we have seen strong growth," said Brad Watson, MENA EY-Parthenon leader.

Investor caution was evident in aftermarket performance, with 10 of the 14 IPOs closing below their offer price on debut. Companies are increasingly timing offerings to match sentiment and macroeconomic conditions, EY said.

A notable trend was the rise in secondary listings, which made up 64.3 percent of all offerings in the second quarter, compared with 35.7 percent in the first quarter. The shift signals a preference for shareholder exits over raising fresh capital amid market volatility.

Looking ahead, EY expects 14 IPOs in the second half of 2025, including 10 from Saudi Arabia. Listings are also planned in Egypt, Tunisia, and Morocco, underscoring the region's growing market depth.

"The diversity of sectors represented, along with milestone listings such as Dubai Residential REIT, highlights the depth of opportunities across the region. With a healthy pipeline for the remainder of 2025, we expect this momentum to continue," said Watson.

Earlier this year, PwC Middle East echoed similar views, projecting a strong and diversified IPO pipeline into late 2025 and early 2026.

Arab News