IPOs in Saudi market poised for strong growth in 2025: EFG Hermes

Karim Meleka, Co-Head of Investment Banking at EFG Hermes

Karim Meleka, Co-Head of Investment Banking at EFG Hermes, said 2025 is set to witness strong activity in the Saudi and regional IPO markets, with the Kingdom maintaining dominance as it has for the past four to five years.

Speaking to Argaam at the Capital Markets Forum (CMF), Meleka highlighted a wave of IPOs across multiple sectors. Healthcare, real estate, retail, and financial services are all seen to witness significant IPO activity.

EFG Hermes has been actively involved in the healthcare sector. Last year, the firm took two sector companies public and is planning to list two more in 2025.

The real estate sector is also heating up, particularly in facilities management, where EFG Hermes is working on two upcoming IPOs.

Retail is another sector drawing increased IPO interest, garnering elevated interest from major market players, Meleka noted, citing Nice One Beauty Digital Marketing Co.’s recent TASI debut.

The beauty e-commerce company, Nice One, became Saudi Arabia’s first unicorn to go public, a move that could attract further investor interest to the sector.

Financial services are also seeing a pick-up in IPO activity. One firm listed in 2024, while two others are slated to go public in the second half of this year, reflecting a broad-based market expansion, he pointed out.

Beyond IPOs, Meleka sees secondary offerings gaining traction in 2025. He described them as “the next big test” for market liquidity and believes stronger participation in these offerings should enhance capital market efficiency.

Private equity firms are also expected to play a bigger role, with many looking to exit through secondary offerings, according to Meleka.

Expected secondary offerings, deemed the most active segment, are estimated to range between $100 million-$200 million, with more issuers and investors keen to test market conditions, he added.

On the mergers and acquisitions (M&A) front, Meleka said the valuation gap among public and private markets is narrowing in some sectors, setting the stage for more dealmaking.

EFG Hermes took part in several major M&A transactions last year, including Maarif for Education and training Co.’s acquisition of a Riyadh-based school group, Meleka added.

He said the firm is eyeing similar M&A deals in the food and retail sectors this year.

Meleka expects two to three large transactions to close in 2025, with a major food and beverage deal already in the pipeline.