Market Insights Financial Corporate Finance

Initial Public Offerings - Saudi Arabia

Saudi Arabia

The transaction value in the Initial Public Offerings market is projected to reach US$4.24bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of -20.75% resulting in a projected total amount of US$3.36bn by 2025.
The average transaction value in the Initial Public Offerings market amounts to US$0.16bn in 2024.
From a global comparison perspective, it is shown that the highest transaction value is reached in China (US$63,330.00m in 2024).

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Analyst Opinion

The Initial Public Offerings market in Saudi Arabia has been experiencing a significant surge in activity recently.

Customer preferences: Investors in Saudi Arabia are increasingly showing interest in IPOs due to the potential for high returns and portfolio diversification. The market has witnessed a growing number of retail investors participating in IPOs, attracted by the opportunity to invest in promising companies at an early stage.

Trends in the market: One notable trend in the Saudi Arabian IPO market is the rise of tech companies going public. As the country aims to diversify its economy and reduce its reliance on oil, tech startups are gaining traction among investors. These companies offer innovative solutions and growth potential, appealing to both local and international investors.

Local special circumstances: Saudi Vision 2030, the ambitious strategic framework to reduce the country's dependence on oil, has played a crucial role in shaping the IPO landscape. The government's push for privatization and the development of non-oil sectors have created opportunities for companies to list on the stock exchange. This has led to a wave of IPOs in sectors such as technology, healthcare, and renewable energy.

Underlying macroeconomic factors: The stable economic growth and favorable regulatory environment in Saudi Arabia have also contributed to the growth of the IPO market. The country's efforts to improve transparency, governance, and investor protection have increased confidence in the market, attracting both domestic and foreign investors. Additionally, the low interest rate environment and ample liquidity in the financial system have provided a conducive backdrop for companies looking to go public.

Methodology

Data coverage:

Figures are based on the revenue generated by the Investment Banking market, as well as the transaction value, the number of transactions, and the average transactions size of the Mergers and Acquisitions (M&As) and Initial Public Offerings (IPOs) markets.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach and are based on a specific rationale for each market. As a basis for evaluating markets, we use market research and analysis, as well as data from annual financial reports. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus, such as GDP, wealth per capita, and total investment (% of GDP). This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita and total investment (% of GDP).

Additional Notes:

The market is updated twice per year in the event that market dynamics change.