Dubai: LuLu Retail had a sluggish start on its ADX debut, dipping 1.4% in the early minutes. It could yet turnaround as analysts say there are quite a few bids from individual investors coming through and which should immediately reflect in the trades.
By close of trading, the LuLu stock had clawed back to parity at Dh2.04 as retail investor activity continued to buzz.
At the end of first 20 minutes, the stock's traded volumes have shot past 44 million.
LuLu started trading at Dh2.04 a share after one of the most successful UAE/Gulf IPOs in recent times. It set new records in drawing retail investors during the subscription process.
"The buy-sale spreads are tight, and LuLu will see heavy action all day today," said an analyst. "There are lots of bids individually looking to push the stock higher."
More than 82,000 retail investors had taken part in the LuLu subscription.
Investor mix in LuLu
Based on the bate, foreign investors make up nearly 77% of LuLu shareholders, with GCC nationals accounting for 12.82%. UAE Nationals make up 9.86% and other Arab nationals have under 0.5%.
Around 50,000 individuals registering for an ADX National Investor Number (NIN) in the 16 days between LuLu announcing its intention to float and the close of subscriptions. This compares to 50,000 NINs being issued during the whole of 2023.
"Our listing on ADX marks a day of great pride for the entire Lulu team," said Yusuffali M.A., Chairman of Lulu Retail, at the ringing of the bell to mark the start of trading on ADX. "Many of our 55,000 employees have been with our company for decades, demonstrating their commitment to providing for our customers and to growing our business, and this achievement would not have been possible without them."
Looking beyond 'first day bounce'
Typically, with recent IPOs, individual investors have been gunning for first-day bounces, with many of them looking for instant profit taking from that.
The LuLu IPO brought in its wake a wave of first-time IPO investors in the UAE, and they are still finding their feet. Much of that is reflected in the initial action.
"There is broad investor support indicating an upside at some point," said another analyst. "But it’s still too early."
According to Mangal Suvarnan, who picked up the minimum subscription through the LuLu IPO, has been watching the initial trades with a fair degree of attention. "This is my very first investment in UAE’s stock market. Obviously, I'm a bit disappointed with the price drop in the initial phase, but I'm hopeful the value will pick up..."
Such is the sentiment among a large base of LuLu investors - hold on and the share price will look after itself.
