BUS 191219 SAUDI-ARAMCO-IPO-1576764408335
Nahdi Medical Co. Saudi Arabia's largest pharmacy retail chain is seeking a valuation of around 16 billion riyals ($4.3 billion) in the IPO. Image Credit: REUTERS

Riyadh: Saudi Arabia's largest pharmacy retail chain hired the local unit of HSBC Holdings Plc and the investment banking arm of Saudi National Bank in what could be the largest IPO in the kingdom since Aramco went public in 2019.

Nahdi Medical Co. plans to sell a 30 per cent stake, or up to 39 million shares, in an initial public offering, according to a statement. The offering price will be determined at the end of a book-building period.

The pharmaceuticals chain is seeking a valuation of around 16 billion riyals ($4.3 billion) in the IPO, people familiar with the matter said earlier this month. The firm, half owned by Jeddah-based investment firm Sedco Holding, received regulatory approval for the listing in December.

Nahdi Medical has a network of pharmacies with 1,151 outlets across 144 cities. It had a revenue of 8.6 billion riyals and profit of 849 million riyals for 2020.

More family-owned businesses in Saudi Arabia are listing on the kingdom's exchange as share sales see huge investor demand, with most IPOs getting priced at the top of offering ranges. The most recent wave has already seen a digital security firm owned by Saudi Arabia's wealth fund draw about $57 billion in orders from institutional investors.

Saudi Arabian companies raised almost $9.3 billion from share offerings last year, making it the most active IPO market in the Middle East and Africa behind Israel, according to data compiled by Bloomberg. ACWA Power International's $1.2 billion IPO last year was the largest since Aramco raised almost $30 billion in the world's biggest ever stock offering.

Last week, Al Dawaa Medical Services Co., another pharmaceutical retail company in Saudi Arabia, said it is seeking to raise about $500 million from an IPO.