Al-Qahtani Auction Co expects strong turnout for IPO, says CEO

Al-Qahtani Auction Co. is expecting strong investor interest in its planned initial public offering (IPO) on Nomu Parallel Market, the company's chief executive Saud Al-Qahtani told Argaam in an exclusive interview on Tuesday. The company is finalizing the listing application along with other paperwork required by the Capital Market Authority (CMA), the Kingdom's market regulator. He added that Al-Qahtani is planning to move to Tadawul two years after listing on Nomu.

Q: What is the reason behind listing Al-Qahtani shares on Nomu?

A: Al-Qahtani listing is mainly aimed to ensure the company's ability to continue operations going forward. Bolstered by the high liquidity of equity markets, the company will cushion against risks of shareholder exits.

Al-Qahtani is currently completing the listing procedures required by the Capital Market Authority (CMA); however, all paperwork may be finalized even after entering the parallel market.

It applies the highest corporate governance standards and is committed to transparency in all deals.

Q: What are your expectations for investor response to the IPO?

A: After obtaining the CMA approval, we expect strong investor turnout to the offering. The strong response will be driven by several factors, mainly the company's goodwill, market capitalization, and financial results, which together make Al-Qahtani a good opportunity for all investors.

Q: Are you planning to list shares on Tadawul? If yes, when?

A: Moving to Tadawul is a major target of Al-Qahtani. Listing on Nomu is the step before moving to the main equity market. The company will fulfill all requirements to list shares on Tadawul, two years after being listed on the parallel market.

Q: What about Al-Qahtani's future expansions and how many branches does it have now?

A: The company currently owns three branches in Dammam, Jeddah and Yanbu. Al-Qahtani is eying more expansions to provide better services and fulfill client demand by opening new branches in other cities, including Riyadh, Madinah and Khamis Mushait. It also aims to break into new markets, namely the United Arab Emirates and Egypt. Compared to peers, the company has a competitive advantage, thanks to having several branches spreading each on a total area of over 25,000 square meters across the Kingdom.

Al-Qahtani's future expansions depend on analyzing the market data and needs, in addition to the outlook and possible changes going forward.

The company mainly aims to add real estate auctions to its business portfolio and it is currently finalizing the procedures required for this move. Al-Qahtani is also seeking to promote the business of electronic equipment inspection so as to serve as a one-stop-shop for all clients across the Kingdom.

Q: Can you tell us about the company's contracts with major authorities in the Kingdom?

A: Al-Qahtani won several tenders this year. It signed contracts with Saudi Arabia's General Authority for Civil Aviation (GACA), Saudi Arabia Neurosurgical Society and the Saudi ministry of interior. Under these contracts, the company will hold auctions for those entities across several cities in 2017, 2018 and 2019.

Furthermore, the company has a huge data base of major clients inside and outside the Kingdom, thanks to its advertising campaigns in the UAE, Qatar, Kuwait, Bahrain and Egypt.

Al-Qahtani has completed mega auction projects for government organizations, including The National Water Co., National Titanium Dioxide Company Limited (Cristal), Al-Suwaidi Equipment & Transport Co. Ltd., Yamama Co. and SRACO Co.