Derayah Financial Company (“Derayah” or the “Company” or the “Issuer”), the leading independent digital investment platform in Saudi Arabia (the “Kingdom” or “KSA”), today announces the price range for its initial public offering (the “IPO” or “Offering”) and the commencement of the institutional book-building period for Participating Parties. The final Offering price will be determined at the end of the book-building process.
The price range for the Offering has been set between SAR 27 – 30 per share (the “Price Range”). This implies an offering size between c. SAR 1.35 billion (c. USD[1] 360 million) and c. SAR 1.50 billion (c. USD 400 million) implying a total market capitalization at listing between c. SAR 6.74 billion (c. USD 1.80 billion) and c. SAR 7.49 billion (c. USD 2.00 billion). The institutional book building period commences today, 2 February 2025G and ends at 2 PM KSA time on 9 February 2025G. The final Offering price will be determined at the end of the book-building process.
Background to the Offering:
- On 25 December 2024G, the Capital Market Authority (the “CMA”) approved the Company’s application for registering its share capital and the Offering of 49,947,039 ordinary shares (“Offer Shares”), representing 20% of the Company’s issued share capital, by way of a partial sale by the Company’s current shareholders[2] in proportion to their existing shareholding (the “Selling Shareholders”). The final price at which all subscribers in the Offering will purchase Shares will be determined at the end of the book-building period.
- The Price Range of the Offering has been set between SAR 27 and SAR 30 per share.
- The total Offering size is expected to be between c. SAR 1.35 billion (c. USD 360 million) and c. SAR 1.50 billion (c. USD 400 million) implying a total market capitalization at listing between c. SAR 6.74 billion (c. USD 1.80 billion) and c. SAR 7.49 billion (c. USD 2.00 billion).
- The Offer Shares will be listed and traded on the Saudi Exchange (Tadawul) following the completion of the Offering and listing formalities with the CMA and the Saudi Exchange.
- The Selling Shareholders collectively own the majority of the Company’s Shares prior to the Offering. Following completion of the Offering, the Selling Shareholders will collectively own 80% of the Company’ share capital.
- The net proceeds of the Offering will be distributed to the Selling Shareholders in proportion to their respective ownership of the Offer Shares. The Company will not receive any part of the Offering Proceeds.
- After listing, at least 60% of the Company’s shares shall be subject to a lock-up period of 24 months from the date of the start of trading of the Company’s shares on the main market. All substantial shareholders, as well as shareholders holding more than 3% of the Company’s share capital, directors, and senior executives who hold shares in the Company will be subject to this lock-up period. New shareholders will not be subject to the lock-up period.
- The Offer Shares will be offered to Participating Entities, with a claw back to Individual Subscribers of up to 10% of the offered Shares.
- With respect to the Offering, the Company has appointed HSBC Saudi Arabia as sole financial advisor, bookrunner, global coordinator, lead manager and underwriter.
- Derayah Financial Company, Alinma Investment Company, Alistithmar Capital, Aljazira Capital, Alkhabeer Capital, Al Rajhi Capital, ANB Capital, BSF Capital, GIB Capital, Riyad Capital, SAB Invest, Sahm Capital, SNB Capital, and Yaqeen Capital act as Receiving Entities (collectively, the “Receiving Entities”) for the Individual Subscribers tranche.
- Individual Subscribers wishing to subscribe to the Offer Shares must submit their subscription requests electronically through the websites and platforms of the Receiving Entities that provide this service to subscribers, or through any other means provided by the Receiving Entities through which the Individual Investors will be able to subscribe to the Company’s shares during the Offering Period.
Eligible Investors:
The Offer Shares will be offered for subscription to individual investors (“Individual Subscribers”) and institutional investors (“Participating Parties”), including Participating Parties outside the United States in accordance with Regulation S under the US Securities Act of 1933G, as amended (the “Securities Act”).
The Offering is restricted to the following two groups of investors:
- Tranche (A):
Participating Parties: - This tranche includes the categories entitled to participate in the book-building process as specified under the Instructions for Book Building Process and Allocation Method in Initial Public Offerings issued by the CMA, including investment funds, qualified foreign companies and institutions, investors from Gulf (GCC) companies, and other foreign investors. 49,947,039 Offer Shares will be allocated to Participating Parties, representing 100% of the total Offer Shares, and the final allocation will be made after the end of the subscription period for Individual Subscribers (as defined in Tranche (B) below). If sufficient demand from Individual Subscribers to subscribe to the Offer Shares allocated to them, the financial advisor shall have the right, in coordination with the Company and the Selling Shareholders, to reduce the number of shares allocated to the Participating Parties to a minimum of 44,952,335 shares, representing 90% of the total Offer Shares, using the discretionary share allocation mechanism. The Company and its financial advisor may decide, at their discretion, not to allocate any shares to certain tranches of the Participating Parties.
- Tranche (B):
Individual Subscribers: - This tranche includes Saudi natural persons, including any divorced or widowed Saudi woman with minor children from a non-Saudi husband, who is entitled to subscribe in their names for her own benefit provided she submits proof that she is divorced or widowed and proof that she is the mother of her minor children, and any non-Saudi natural person who is resident in the Kingdom or Gulf Cooperation Council country national who have an investment account and an active investment portfolio with one of the Receiving Entities and is entitled to open an investment account with one of the Capital Market Institutions (otherwise subscriptions will be rendered void and the amounts paid will be refunded) . A subscription for shares made by a person in the name of his divorcee shall be deemed void and if a transaction of this nature is proved to have occurred, the law shall be enforced against the applicant. If a duplicate subscription is made, the second subscription will be considered void and only the first subscription will be accepted. A maximum of 4,944,704 Offer Shares will be allocated to Individual Subscribers, representing 10% of the total Offer Shares. If Individual Subscribers do not subscribe to all the Offer Shares allocated to them, the financial advisor, in cooperation with the Company, may reduce the number of Shares allocated to Individual Subscribers in proportion to the number of Shares to which they subscribed.
- Individual Subscribers must, at the time of subscription, have an active stock portfolio at a Capital Market Institution associated with the Receiving Agent being subscribed through, otherwise subscriptions will be rendered void and the amounts paid will be refunded.
IPO Timeline Highlights:
- 23 January 2025: Intention to Float announced.
- 02 February 2025: Price range & start of institutional book building.
- 09 February 2025: Close of institutional book building.
- 13 February 2025: Final price announcement.
- 20 February 2025: Start of retail subscription.
- 22 February 2025: Close of retail subscription.
- 27 February 2025: Final allocation.
