UAE-Based Lulu Retail Gets Set For IPO In Abu Dhabi

UAE-based Lulu Retail Holdings PLC (Lulu Retail) has announced an initial public offering (IPO) that will see it list its shares on the Abu Dhabi Securities Exchange (ADX).  

Lulu Retail, a major pan-GCC retailer, eyes floating 25 percent of its total shares as part of the offering. 

The IPO will offer 2,582,226,338 shares, each with a nominal value of US$0.014, to be sold by the company's sole shareholder, Lulu International Holdings Limited. The share sale will target different investor categories, including UAE retail investors, eligible employees, professional investors, and senior executives of the group. 

The subscription period will open on Monday, October 28, and close on Tuesday, November 5. The final offer price of the shares will be determined through a book-building process. 

Lulu Retail’s dividend policy targets a payout ratio of 75 percent of its annual distributable profits after tax. The company plans to pay dividends semi-annually, with the first dividend for the six-month period ending December 31, 2024, expected to be paid in the first half (H1) of 2025. This is subject to financial performance, internal and external conditions, and legal requirements. 

The listing of Lulu Retail's shares on ADX is expected to take place around Thursday, November 14. 

Commenting on the offering, Yusuffali M.A., founder, chairman, and non-executive director of Lulu Retail said, in a statement, “We founded Lulu in 1974 with the ambition to introduce and embed organized retail in the UAE, and a commitment to create a shopping experience that customers would love and remain loyal to. We have exceeded our own expectations, and today, Lulu operates more than 240 stores across six GCC countries, delivering immense value every day for new and loyal customers.” 

“Integral to our growth is the vision and ambition of the UAE, KSA and the other GCC nations where strong national leadership is enabling positive demographic and consumption trends and driving impressive economic growth,” he continued. “We’re looking forward to welcoming new shareholders to Lulu, and we are sure they will share our passion for the company and excitement for the future.” 

Saifee Rupawala, chief executive officer of Lulu Retail, added, “Our scale is combined with a track record of delivering robust revenue growth, attractive profit margins, and a well-defined growth strategy built around enhancing and delivering greater value from our existing stores, expanding our store network, delivering operational efficiencies, and growing our high-value private label and loyalty programs. With GCC retail presenting a $100 billion market opportunity over the next five years and our business in the Kingdom of Saudi Arabia primed for further growth, we are confident that Lulu will continue to be where the world comes to shop.” 

Lulu Retail accounted for 13.5% of the GCC modern offline grocery market in 2023. According to Euromonitor, Lulu was the second-largest grocery retailer in the UAE and the largest in Oman, Qatar, Bahrain, and Kuwait in 2023. 

Lulu operates a range of retail formats, including hypermarkets, express stores, and mini markets. As of August 2024, the group managed 240 stores, with 103 located in the UAE, 56 in Saudi Arabia, and 81 across other GCC markets. 

Lulu Retail has expanded its reach through a combination of physical stores and online channels. The company provides e-commerce services via its website and mobile app. Partnerships with platforms such as Amazon in the UAE, HungerStation in Saudi Arabia, and Talabat across the GCC support its online operations, offering more convenience for customers. 

In February, Bloomberg reported that LuLu Group initiated discussions with banks to explore potential roles in a forthcoming IPO anticipated to raise $1 billion. 

In 2020, LuLu garnered a valuation exceeding $5 billion, following an investment from a consortium affiliated with a member of Abu Dhabi's ruling family, wherein a 20 percent stake valued at slightly over $1 billion was acquired.