Page 67 - SALIK PR REPORT OCTOBER 2024

UAE: Lulu IPO set to maintain trend of heavy oversubscription, say analysts

Story by Waheed Abbas

• 15h • 2 min read

File Photo© Provided by Khaleej Times
The upcoming next week is expected to be another blockbuster IPO, maintaining the trend of strong
oversubscription that previous public offerings saw in the post-pandemic period.

The previous IPOs that were floated on the Dubai and Abu Dhabi bourses saw tremendous
response from retail and institutional investors, prompting some of them to increase the amount of
funds that they were looking to raise through the share sale.
Vijay Valecha, chief investment officer at Century Financial, said the response to Lulu IPO from
retail and institutional investors in the UAE is anticipated to be very strong, with an expected
oversubscription.

“LuLu Group, founded in 1974, has grown into a common household name in the UAE, with about
240 stores across six countries. As per Global Media Insight, the UAE has a population of 10.17
million, with a significant portion from India, Pakistan, Bangladesh and the Philippines. This Asian
demographic forms the primary customer base for Lulu. Given the promising growth prospects in
the UAE, this demographic is expected to expand, and with LuLu being recognised as the most
affordable retailer in the country, it is well-positioned for growth, supporting the case for its IPO,”
said Valecha.

“Moreover, the company intends to distribute 75 per cent of its annual distributable profits after tax
as dividends, paid out semi-annually. In 2023, LuLu reported earnings of approximately $753
million, reflecting a year-over-year increase of about 7.2 per cent. Hence, investors and institutions
looking for stable dividends may also be interested in the IPO,” he added.

https://www.msn.com/en-ae/news/featured/uae-lulu-ipo-set-to-maintain-trend-of-heavy-
oversubscription-say-analysts/ar-AA1sEURf?ocid=BingNewsSerp