Arabian Mills set final IPO price at $17.59 per share as CEO details growth vision

Short Url
Updated 12 September 2024
Follow

Arabian Mills set final IPO price at $17.59 per share as CEO details growth vision

  • The offering comprises 15,394,502 offer shares
  • Company’s market capitalization upon listing would be SR3.387 billion

RIYADH: Saudi wheat flour producer Arabian Mills for Food Products Co. has set its final initial public offering price at SR66 ($17.59)  per share on the Tadawul main market.

During the book-building process, the company received orders worth SR134.1 billion from local and international investment institutions for its IPO of approximately 30 percent of its shares on the Saudi Stock Exchange.

The offering comprises 15,394,502 offer shares.

The firm announced that the institutional offering was oversubscribed by about 132 times, leading to the offer price being set at the maximum of the range.

This indicates the company’s market capitalization upon listing would be SR3.387 billion.

As a result, the current stockholders will receive the net proceeds of the amount raised through the IPO, which is SR1.02 billion.

From this public offering, the shareholders selling their shares, including Abdulaziz Alajlan Sons for Commercial and Real Estate Investments, Sulaiman Abdulaziz Al-Rajhi International Co., and the National Agricultural Development Co., will collectively receive SR1.02 million.

0 seconds of 1 minute, 12 secondsVolume 90%
Press shift question mark to access a list of keyboard shortcuts
00:00
01:12
01:12
 

Arabian Mills announced on Sept. 1 that the price range for the offering was set between SR62 and SR66 and appointed HSBC Saudi Arabia as the financial adviser, bookrunner, and lead manager for the institutional subscription, as well as the underwriter for the public offering.

“We feel that the demand, for the investors, this is the right time for any kind of an IPO. The macro-environment has been very favorable in general,” Rohit Chugh, CEO of Arabian Mills, told Arab News.

He added: “Secondly, as a company, we have seen about close to three years of privatization, which has given us an adequate amount of time to sort of reflect on our performance, which has been fantastic.”

This period has also allowed potential investors to review the company’s financial performance over the last two and a half years, giving them a complete view and boosting their confidence in the firm’s stability and prospects.

“Also, we have very good, strategic plans in place as far as future plans go, and now that we are very clear in terms of our vision, so if you take the past and the future, then it’s a very exciting time as far as we are concerned,” Chugh said.

He added: “In reality, the shareholders continue to remain invested. They’re very positive about the company, and that’s why they are just selling 30 percent of their shareholding to the new investors.”

Specifically, Alajlan Brothers will retain 35 percent, AlRajhi will keep about 25 percent, and NADEC will hold 10 percent, making up the 70 percent of shares that will remain with the existing investors.

“The 30 percent of the shareholding is what they have offered at a lucrative IPO price to the new investors because they feel that, with the growth plans, which we have in place for the future, they would like to invite new investors, to come and pitch in and be a part of this whole success story as we move,” the CEO said in the interview.

Expansion plans




Rohit Chugh, CEO of Arabian Mills. Supplied

Chugh stated that the company is currently focused on expanding its presence in new regions within Saudi Arabia.

Although they are already well-established in the Kingdom’s central, northern, and southern parts, they recognize significant opportunities in other areas they haven’t yet explored.

“Therefore, we are planning to tap those growth opportunities in the western, eastern and the northern parts of the country by opening up distribution centers. West, for example, is where Makkah, Madinah is,” he said.

Chugh continued: “If you talk about the east, a lot of action is happening there as well. The Tabuk north side is where the NEOM projects will be coming up in the future, so we want to be a part of the growth journey, tapping all the right corners in Saudi Arabia.”

Currently, the company is not planning to expand into international markets because it is focused on selling wheat flour at subsidized prices through its arrangement with the General Food Security Authority. However, they are open to exploring export opportunities in the future.

Given their significant milling capacity and robust infrastructure in Saudi Arabia and the Gulf Cooperation Council, they are well-positioned to handle such opportunities if they arise.

For now, their focus remains on their existing operations, and any decision to expand internationally would depend on the conditions at that time.

IPO trajectory

The company’s CEO underlined that when setting the IPO price, the management aimed to ensure that investors would have the opportunity to make a profit.

When asked about his forecast or trajectory stock, Chugh said they could have set a higher price, but they chose a lower cost to attract new investors who would join them in the company’s growth journey.

The intention was to leave some potential for capital appreciation, as the management believes the firm’s true value is higher than the IPO price.

“That’s where we see that there should be a positive trajectory in the coming time. Obviously, this is subject to market conditions and global conditions,” he said.

Chugh added: “Nobody can predict that. But yes, we are optimistic as a company that we have priced it at the right pricing, like we got at SR66.”

He believes there are strong growth prospects in Saudi Arabia, driven by the country’s Vision 2030, which is set to have an impact well beyond its target year.

“Obviously, the next four, five years are critical for us, but we are even looking beyond that to the next 15, 20 years and seeing how we can take this organization to fulfill its maximum potential as part of the Vision 2030 and beyond,” Chugh said.


Peru keen to boost agricultural, food exports to Saudi Arabia, foreign minister says

Updated 59 min 24 sec ago
Follow

Peru keen to boost agricultural, food exports to Saudi Arabia, foreign minister says

RIYADH: Peru is seeking to boost exports of agricultural and food industry products to Saudi Arabia while leveraging the tax incentives and benefits available to foreign investors, a top official said.

During a meeting in Riyadh with Federation of Saudi Chambers board member Emad Sadad Al-Fakhri, Peru’s Minister of Foreign Affairs Elmer Schialer Salcedo also invited investors from the Kingdom to an upcoming agricultural products exhibition scheduled for September, the Saudi Press Agency reported.

Salcedo explained that while South American exports to Saudi Arabia total about $3.8 billion annually, Peru accounts for only $70 million of that sum. 

The newly released SPA statement said: “Al-Fakhri briefed the Peruvian delegation on recent developments in the Saudi economy and the Kingdom’s efforts to strengthen its economic partnerships, including with Peru. He underscored Saudi Arabia’s competitive advantages and investment opportunities.”

It added: “Al-Fakhri also stressed the importance of enhancing bilateral cooperation between the federation and its Peruvian counterpart through signed agreements and a joint business council. He proposed increasing the exchange of trade delegations, organizing economic forums, and exploring investment prospects in sectors such as tourism, trade, and agriculture.”

Peru opened an embassy in Riyadh in 2012, and the Kingdom followed suit in Lima in 2013, marking a milestone in their relations. Since then, economic and political ties have grown progressively, reflected in trade exchanges that have reached a peak of $188 million in recent years.

Writing for Arab News ahead of his trip to Saudi Arabia, Salcedo said he is “struck by how much potential lies in building bridges between our nations.”



The minister highlighted opportunities for investors from the Kingdom across several sectors, adding that economic protections are “reinforced by a legal framework that guarantees equal treatment for foreign investors and adherence to international investment protection mechanisms.”

In energy, key initiatives include the petrochemical plant project, the Southern Peru Integrated Gas Transportation System, and the 2025–2034 Transmission Plan. 

In mining, major projects such as El Galeno and Los Chancas stand out, while infrastructure developments include the Andean Longitudinal Highway, the Ancon Industrial Park, and the Ilo Desalination Plant.

These large-scale undertakings offer opportunities for Saudi investors to contribute to Peru’s economic transformation while ensuring sustainable and profitable returns.

“Peru warmly welcomes Saudi businesses, investors and policymakers to discover the vast opportunities that this dynamic relationship can offer. Together, we can open new economic frontiers and lay the foundation for a future of shared prosperity, innovation and enduring cooperation,” said Salcedo.


Saudi Arabia’s real GDP grows 2.7% in Q1: GASTAT 

Updated 01 May 2025
Follow

Saudi Arabia’s real GDP grows 2.7% in Q1: GASTAT 

RIYADH: Saudi Arabia’s economy saw annual growth of 2.7 percent in the first quarter of 2025, driven by strong momentum in non-oil activities as the Kingdom continues efforts to diversify away from hydrocarbons. 

According to flash estimates released by the General Authority for Statistics, non-oil activities expanded 4.2 percent during the first three months of the year, extending their growth streak to 17 consecutive quarters. Government services rose 3.2 percent, while oil-related activities contracted 1.4 percent. 

Saudi Arabia’s growth in the non-oil sector aligns with the goals outlined in the Vision 2030 program, which aims to diversify the country’s economy by reducing reliance on crude revenues. 

This comes as the International Monetary Fund, in its latest economic outlook, noted that short-term growth in the Middle East will be driven by the expansion of the non-oil sector, projecting the region’s economy to grow by 2.6 percent in 2025 and 3.4 percent in 2026. 

In a release, GASTAT stated it has conducted “a comprehensive revision of GDP estimates as part of its efforts to achieve high levels of alignment with international standards and data quality.” 

It added: “Nominal and real GDP (annually and quarterly) time series have been revised accordingly.”  

On a quarterly basis, seasonally adjusted GDP rose 0.9 percent, with government activities jumping 4.9 percent and non-oil output increasing 1.0 percent. Oil sector GDP dropped 1.2 percent amid ongoing production cuts under the OPEC+ agreement. 

Saudi Arabia’s GDP growth also aligns with the broader Middle East trend, where other countries are steadily diversifying their economies. 

Qatar’s full-year GDP for 2024 grew by 1.7 percent, driven by a 1.9 percent rise in non-hydrocarbon activities. The UAE’s central bank projects 4 percent GDP growth in 2024, while Bahrain reported year-on-year expansion of 2.1 percent in the third quarter. 

Saudi Arabia is ramping up efforts to enhance its data infrastructure, drive digital transformation, and harness artificial intelligence and advanced technologies to boost the efficiency and accuracy of its statistical operations. 

Speaking at the first Saudi Statistics Forum held earlier this week, Fahad Al-Dossari, president of GASTAT, reiterated the authority’s commitment to supporting decision-makers by continuously developing the statistical system to meet national and international standards. 

“Statistics are no longer merely supportive tools; today, they are at the heart of development work and a critical enabler of sustainable development, ensuring efficient spending, enhancing service quality, and supporting economic and social growth,” Al-Dossari said during the event in Riyadh. 


Strong non-oil growth to support GCC economies amid OPEC+ cuts: IMF 

Updated 01 May 2025
Follow

Strong non-oil growth to support GCC economies amid OPEC+ cuts: IMF 

RIYADH: Short-term gains in non-oil sectors are expected to help Gulf Cooperation Council countries offset the negative impact of prolonged OPEC+ crude production cuts, according to an International Monetary Fund analysis.

In its latest report, the organization projected that the economy of the GCC region will grow by 3 percent in 2025, accelerating to 4.1 percent by 2028.

The analysis affirms the progress of the economic diversification journey adopted by the group’s member states, including Saudi Arabia and the UAE, which aim to strengthen their non-oil sectors and reduce their decade-long reliance on crude revenues. 

“In the GCC, robust non-oil activity linked to diversification efforts helped to offset the negative impact of extended OPEC+ production cuts,” said Jihad Azour, director of IMF, Middle East and Central Asia Department. 

To maintain market stability, OPEC+ has been cutting output by 5.85 million barrels per day, equal to about 5.7 percent of global supply, since 2022. 

In March, the oil producers’ alliance decided to proceed with a planned April oil output increase, with a monthly rise of 138,000 bpd.

Regional outlook 

In the latest report, the IMF projected that the economy of the Middle East and North Africa region will expand by 2.6 percent in 2025 and 3.4 percent in 2026. 

In its previous projection made in October, the IMF had forecasted MENA economies to grow by 4 percent in 2025 before accelerating to 4.2 percent the following year. 

“We expect growth to pick up in 2025 and 2026, assuming oil output rebounds, conflict-related impacts stabilize, and progress is made on structural reform implementation,” said Azour. 

He added: “However, the projections have been lowered compared with October 2024, reflecting weaker global growth, lower oil prices affecting oil exporters, still-lingering conflicts, and a more gradual resumption of oil production than we had expected after the extension of OPEC+ voluntary oil cuts.” 

The IMF said the Kingdom’s economy is projected to grow by 3 percent in 2025 and 3.7 percent in 2026. 

The projected economic growth of Saudi Arabia in 2025 is higher than that of its Arab neighbors, including Qatar, Kuwait, Oman, and Bahrain. 

According to the analysis, Bahrain is expected to witness a gross domestic product growth of 2.8 percent in 2025, followed by Qatar at 2.4 percent, Oman at 2.3 percent, and Kuwait at 1.9 percent. 

In December, a report by Mastercard Economics projected that the Kingdom’s economy is expected to witness an expansion of 3.7 percent in 2024, driven by growth in non-oil activities. 

Affirming the growth of Saudi Arabia’s economy, in March credit rating agency S&P Global raised the Kingdom’s rating to “A+” from “A” with a stable outlook underpinned by the ongoing social and economic transformation in the country. 

The IMF said that the economy of the UAE is expected to grow by 4 percent in 2025 and further accelerate to 5 percent in 2026, making it the highest-growing economy in the GCC region. 

The organization added that inflation has been trending down for most economies and is projected to generally remain within established targets over the medium term.

In April, the World Bank projected that the real GDP of the MENA region is projected to rise 2.6 percent in 2025 and 3.7 percent in 2026. 

In its analysis, the World Bank attributed this projected growth to the easing of OPEC+ production cuts, a rebound in agricultural output across oil-importing economies, and resilient private consumption.

Tackling challenges

In the report, the IMF outlined various challenges that could dampen growth prospects, including trade tensions, geopolitical conflicts, and climate shocks. 

“Our analysis shows that persistent spikes in uncertainty triggered by global shocks are associated with large output losses in the MENA region: if the sharp rise in global uncertainty observed so far in 2025 continues, it could lead to output about 4.5 percent below its original trend for the average MENA economy after two years,” said Azour. 

The IMF official added that geopolitical tensions could disrupt trade, tourism, and supply chains, and increase refugee flows. 

He further said that the MENA region remains vulnerable to extreme weather events, including droughts and floods, which could negatively affect economic growth.

“Reduced official development assistance could have serious economic and humanitarian consequences, especially for the region’s low-income countries and fragile and conflict-affected states,” said Azour. 

He added: “There are also some upside risks. The swift resolution of conflicts and accelerated implementation of structural reforms could improve regional growth prospects substantially.” 

Azour also urged policymakers to adopt steps that could help shield their economies from worst-case scenarios and prioritize safeguarding macroeconomic and financial stability. 

He cautioned countries facing high inflation rates to maintain a prudent monetary stance until inflation expectations are firmly anchored.

Azour urged countries in the region to maintain adequate levels of international reserves should be preserved; where exchange rates are flexible, which could help them absorb economic shocks. 

“In the near term, an important way to create policy space is by strengthening institutional frameworks for fiscal and monetary policy,” said Azour. 

He added: “Implementing credible medium-term fiscal frameworks and fiscal rules, along with reinforcing central bank independence, will help anchor expectations and enhance countries’ capacity to navigate uncertainty.” 

The IMF official also asked countries in the region to continue their economic reforms, adding that ongoing challenges are not a reason to delay their transformation programs. 

He added that these initiatives require improved governance, the development of a dynamic private sector, and the creation of strategic trade and investment corridors both with other regions and within the MENA region.

“Delay can be costly when the world prospects are uncertain, and change is fast. Instead, countries should accelerate the long-discussed structural reform agenda to reduce vulnerabilities to shocks and seize opportunities arising from the evolving global trade and financial landscape,” added Azour. 


BNY gets license for Saudi regional HQ as global banks grow presence

Updated 01 May 2025
Follow

BNY gets license for Saudi regional HQ as global banks grow presence

DUBAI: Bank of New York Mellon has received a license to set up a regional headquarters in Saudi Arabia, it said on Thursday, joining others lured by incentives as the Kingdom seeks to boost its appeal as a financial hub.

Riyadh has been looking to attract more companies to set up their regional headquarters by offering tax breaks as Crown Prince Mohammed bin Salman looks to wean the economy off oil by attracting foreign investment.

Saudi Arabia’s new rules mandate foreign firms to have regional headquarters in the Kingdom before they can access lucrative government contracts.

In May 2024, Goldman Sachs received a license to set up its regional headquarters in Riyadh. US lender Citigroup secured a similar approval late last year.

The Middle East has emerged as a crucial growth market for global banks like BNY, driven by a surge in sovereign wealth fund activity, large-scale infrastructure investments, and deepening capital markets across the Gulf.

As regional economies diversify beyond oil and attract foreign capital through reforms and regulatory upgrades, international financial institutions are ramping up their presence to tap into new business opportunities in asset servicing, custody, and advisory.

The new regional headquarters in Riyadh will offer strategic, administrative and corporate support for BNY’s operations across the Middle East, the custodian bank said. 


Saudi Arabia’s net FDI up 26%: GASTAT

Updated 01 May 2025
Follow

Saudi Arabia’s net FDI up 26%: GASTAT

RIYADH: Net foreign direct investment into Saudi Arabia reached SR22.1 billion ($5.89 billion) in the fourth quarter of 2024, representing a rise of 26 percent compared to the previous three months, newly released official data showed. 

According to the General Authority for Statistics, this figure was the highest level across the year, surpassing the SR15.5 billion seen in the first three months of 2024, the SR19 billion recorded in the second quarter, and the SR17.5 billion witnessed in the third.

Saudi Arabia is aiming to attract $100 billion in FDI a year by the end of this decade as it seeks to make significant strides in diversifying its economy and reducing its decades-long dependence on crude revenues.

When it came to inflows, GASTAT revealed SR23.8 billion was recieved in the final three months of 2024, marking a 17 percent rise from the third quarter. 

The value of FDI outflows stood at SR1.8 billion during the fourth quarter, marking a decrease of 39 percent compared to the previous three months. 

Comparison with 2023

The total net value of FDI in the fourth quarter was down 13 percent compared to the same period of 2023, where the figure stood at SR25.5 billion.

Compared to the final quarter of 2023, the value of inflows declined by 11 percent in the last three months of 2024. 

GASTAT added that the value of outflows registered a growth rate of 20 percent compared to the same period of 2023. 

Saudi Arabia’s FDI ambitions gain momentum

The latest figures come after Saudi Arabia rose to 13th place in Kearney’s 2025 Foreign Direct Investment Confidence Index, published in April. 

This is up one spot from last year and also means the Kingdom retained its position as the third-most attractive emerging market, signaling continued global confidence in its transformation strategy.

Kearney said that the advancement of Saudi Arabia in the ranking reflects the nation’s bold, reform-driven approach to building an internationally competitive, future-ready economy. 

In October, the Kingdom also approved an updated investment law to enhance FDI flows, with the Ministry of Investment stating that it would boost transparency and simplify the investment process.

The rule also promises enhanced protections for investors, including adherence to the rule of law, fair treatment, and property rights, alongside robust safeguards for intellectual property and seamless fund transfers.