UAE's LuLu Group set for IPO next year as it plans expansion

Abu Dhabi-based retail conglomerate hires investment bank Moelis to advise it on the deal

LuLu Group operates 239 stores in 11 countries. Nicole Hill / The National

Abu Dhabi’s LuLu Group International is planning to launch an initial public offering next year and has hired investment bank Moelis to advise it on the deal, according to a company representative.

The move comes as the retail conglomerate plans to expand its operations across the Middle East.

“The market sentiment right now is strong and we are confident about the IPO next year,” V Nandakumar, director of marketing and communications at the LuLu Group, told The National on Thursday.

He, however, did not say how much of a stake the company plans to sell through its IPO or where it would be listed.

LuLu Group is currently on an “aggressive expansion push both in the existing markets as well as in new countries including Iraq and other countries in North Africa region”, Mr Nandakumar said.

LuLu, one of the largest supermarket chains in the Gulf, founded by Indian-born businessman Yusuff Ali, operates 239 stores in 11 countries and has sourcing operations spanning 23 countries including the US, the UK, Spain, Turkey and China.

The company's IPO plans come as the number of listings continue to rise in the Middle East and North Africa region as economies recover from the Covid-19 pandemic.

Abu Dhabi’s healthcare provider Burjeel Holdings listed its shares on the Abu Dhabi Securities Exchange this week after raising more than Dh1.1 billion ($300 million) from an 11 per cent stake sale in the company's IPO.

Other listings on the Abu Dhabi bourse this year include Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis and Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate.

In 2020, ADQ, one of the region’s largest holding companies, said it is investing up to $1bn in LuLu Group to help the company expand its operations in Egypt.

The two companies will work together to develop 30 hypermarkets, 100 express shops, logistics hubs and distribution and fulfilment centres across the Arab world’s most populous country, they said at the time.

ADQ and the Sovereign Fund of Egypt also announced a $20bn platform in 2019 to invest in several sectors including health care, food and agriculture, mobility and logistics.

The Mena market recorded a 500 per cent annual increase in the number of listings during the first six months of this year, with 24 IPOs raising $13.5bn, according to an EY report on the region's IPOs. In the second quarter of 2022, nine IPOs raised about $9bn.

The UAE was the biggest IPO market in terms of the aggregate value of deals, while Saudi Arabia led volume with five IPO deals in the first six months of the year, according to the EY data.