Saudi Arabia is gearing up for a substantial increase in initial public offerings (IPOs) in 2025, with plans to list up to 56 companies over the next two years. This ambitious agenda underscores the kingdom’s commitment to diversifying its economy and attracting foreign investment.
Dr. Sultan Altowaim, Head of Research at Al Rajhi Capital, revealed that seven IPOs have already been approved or completed, with two scheduled for listing this month. Additionally, the Capital Market Authority (CMA) is reviewing 97 IPO applications, with expectations that approximately half will receive approval, potentially leading to 56 new listings by the end of 2026.
This anticipated surge follows a period of slower activity in 2023, which saw only 14 listings. However, 2024 witnessed a rebound, highlighted by a significant secondary offering from Saudi Aramco that raised SAR 64 billion, surpassing the SAR 57 billion accumulated in 2022.
Among the notable companies preparing for IPOs is Saudi Global Ports (SGP), a joint venture backed by the Public Investment Fund (PIF). SGP has appointed Goldman Sachs and HSBC to lead its IPO, aiming to raise up to SAR 3.75 billion ($1 billion). Established in 2012, SGP operates the first and second container terminals at King Abdulaziz Port in Dammam and is jointly owned by Saudi Arabia’s PIF, Singapore’s PSA International, and Balaghah Holding.
Another significant development is the planned IPO of Neom, Saudi Arabia’s $500 billion megaproject. Crown Prince Mohammed bin Salman has indicated that the kingdom is setting aside $80 billion for the Neom Investment Fund, which will invest in companies agreeing to operate in the futuristic city. The IPO could occur as early as 2024, potentially adding more than 1 trillion riyals to the kingdom’s stock market.
The Saudi IPO market has already demonstrated remarkable investor interest. Companies have received SR659 billion ($176 billion) in orders for their IPOs, breaking records set by Saudi Aramco in 2019. This surge in demand has been driven by strong returns over the past two years, with investors eager to participate in new offerings.
The Tadawul All Share Index, which tracks the Saudi stock market, has experienced a nearly 8% decline from its March peak. This dip is partly attributed to investors holding onto cash in anticipation of upcoming IPOs. Despite this, the Saudi market is expected to handle 25-30 listings annually without significantly affecting liquidity, indicating a robust capacity to accommodate the planned surge in IPO activity.
The kingdom’s strategy to diversify its economy and reduce dependence on oil revenues is evident in these developments. The government’s Vision 2030 initiative aims to transform the Saudi economy by promoting investments in various sectors, including technology, tourism, and infrastructure. The planned IPOs are a crucial component of this vision, providing capital for new projects and attracting foreign investment.
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