Lulu IPO kicks off; The stock sold out in a single hour, breaking a record high of Dh2.04 per share.

Abu Dhabi : After the wait, the initial public offering (IPO) of Lulu Retail under the Lulu Group has begun in the UAE. The shares were fully subscribed within the first hour of the IPO. The issue price ranges from AED 1.94 to AED 2.04. That is from Rs 44.40 to Rs 46.69. According to this, the company is aiming to raise between $1.36 billion and $1.43 billion through the IPO. That is from Rs 11,424 crore to Rs 12,012 crore.
Earlier there were reports that it could raise up to 170- 180 crore dollars (Rs 15,000 crore). Although Lulu Retail’s official price is lower than this, it still holds the record for the largest IPO of the year in the UAE. The current record for the year is set at $87.7 crore by NMDC in August. Other big IPOs this year were Aleph Education ($51.5 million in May), Parkin Co ($42.9 million in February), Spinneys ($37.5 million in April) and ADNH Catering ($23.5 million in October). Lulu will also hold the records for the largest retailer IPO in the UAE and the largest private company IPO in the UAE.
The Lulu Retail IPO was already expected to be heavily oversubscribed (ten times more applications than shares sold). Observers also predicted that the shares would be completely oversubscribed within seconds of the IPO launch. An oversubscription of more than 100 times (100 times the amount for sale in the IPO) is expected. Parkin has achieved a record 165 times this year. Spinneys and Saudi firm Bindawood Holding are the main rivals awaiting Lulu Retail’s listing on the Abu Dhabi Stock Exchange.
Market value is 2,107 crore dirhams

Considering the price band in the IPO, the market value of Lulu Retail is between 2,004 crore and 2,107 crore dirhams. That is up to Rs 48,231 crore ($546-574 crore). Lulu is selling 25% of its shares (258.2 crore shares) through a three-phase IPO that runs from today to November 5. 89% of these shares are held by Qualified Investment Institutions (QIBs). 10% shares are reserved for small (retail) investors and one percent shares are reserved for eligible employees.

Investment institutions to buy shares

Abu Dhabi Pension Fund, Bahrain Mamtalakat Holding Company, Emirates International Investment Company and Oman Investment Authority have already indicated they will bid for a Lulu Retail stake. The shares they buy will have a 180-day lock-in period. Shares can be sold only after 180 days. Demand for increased IPO allocation for retailers is strong. Lulu may take a decision on this soon.

Application and Listing

Retail investors can submit a minimum application of Dh5,000 (roughly Rs 1.14 lakh). Later you can apply for multiples of Dh1,000 (Rs 22,800). Retail investors and QIBs will get a minimum of 1,000 shares. It is 2,000 shares for eligible employees. The minimum amount that QIBs can spend is Dhs 50 lakh (Rs 11.44 crore).
The deadline for retail investors and institutional investors to apply for shares in the IPO is November 5. The final share price will be announced on November 6. Retail investors will receive an SMS regarding the allotment on November 12. Refund will be given on 13th November. The shares will be listed on the Abu Dhabi Stock Exchange (ADX) on November 14.

Dividend will be considered

Lulu Group is considering paying out 75% of its after-tax profits as dividends. This may also attract investors to the IPO. Dividend will be distributed twice every year. The dividend for the 6 months ending December 31, 2024 will be distributed in the first half of 2025. Meanwhile, the final decision regarding the payment of dividend will be based on the market conditions, performance and the decision of the Board of Directors.

Can be bought from India

Lulu Retail shares can be bought from India. All you have to do is have the NIN required to transact on the Abu Dhabi Stock Exchange. Also should have bank account in UAE or international bank account. Applying for shares will also be subject to laws in India. Those interested in buying shares can apply to one of the receiving banks of the IPO. Banks will have facility for this online and in branches. You can also buy through mobile banking. The receiving banks are First Abu Dhabi Bank, ADCB, Dubai Islamic Bank, Emirates Islamic, Emirates NBD and Mashtech.

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