Retail subscription for Theeb Rent a Car’s IPO starts today

Logo of Theeb Rent a Car Co.

Retail investors start subscription for 1.29 million shares of Theeb Rent a Car Co. for one day today, March 21, 2021, at SAR 40 per share.

In September 2020, the Capital Market Authority (CMA) approved the listing of a 30% stake, or 12.9 million shares, of Theeb Rent a Car.

Theeb Rent a Car Co.'s IPO is the second to be seen in Tadawul during 2021, following Alkhorayef Water & Power Technologies Co.’s IPO.

The Saudi market saw three IPOs during 2020, namely Dr. Sulaiman Al-Habib Medical Services Group in February, Amlak International in July and BinDawood Holding in October.

The offering allocated for institutional investors and mutual funds closed last week, and was 6,010% over-subscribed.

Company Info:

Theeb Rent a Car Co. was established as a closed joint stock company in September 2010 in Riyadh. The company's capital currently stands at SAR 430 million.

The company commenced operations in 1991, as part of the operating activities of Theeb Contracting Establishment, which is owned by Hamoud Abdullah AlTheeb.

The company's main activities are as follows:

- Car rental and provision of other related services;

- Vehicle lease and providing other related services, in addition to customized solutions to vehicle lease customers;

- Sale of used vehicles owned by the company and released from its operations of the above two business segments.

By the end of the first nine months of 2020, the company’s revenue generated from car rental and lease services accounted for 37.9% and 37.7% of total revenue, respectively. Revenue from the sale of used vehicles represented 24.4% of total revenue in the same period.
 

The company has 48 car rental branches across the Kingdom, 44 of which are located on leased land and properties, with the initial periods for the lease contracts ranging between five to 10 years. The company also has 10 maintenance centers and two car sale branches.

Theeb is planning three new car rental branches in Riyadh, and one in Jizan and Dammam each. It plans to renovate two car rental branches in Riyadh, five in Jeddah, one in Dammam, Jubail, Al Baha, Al Qassim and Najran each.

The company's major suppliers are the car dealerships responsible for supplying the company's fleet with vehicles. Following is a table of the top five suppliers for fleet purchases during the period from 2017 to March 31, 2020:

The number of the company's customers by the end of March 31, 2020, reached 264,100, an increase of 3% compared to 2019.

The company’s fleet comprises its rental, lease and service vehicles.

- Car Rental Fleet: As of March 31, 2020, the company operated a peak rental fleet of about 10,800 vehicles.

- Vehicle Lease Fleet: Theeb purchases vehicles upon the customers’ demand. The company’s lease fleet reached 8,541 cars as of March 31, 2020, distributed over more than 350 customers and varies from passenger vehicles to commercial vehicles and light trucks.

- Service Fleet: It represented 2.6% of the company’s total fleet as of March 31, 2020. It is used for roadside assistance, washing and mobile maintenance, towing and for employee usage. At the end of the lifecycle in rental or lease, some selected cars are allocated for service use or as an employee benefit as per the company’s employee car policy.

During the three-month period ended March 31, 2020, the company took delivery of approximately 1,435 vehicles and operated an average fleet of 19,193 vehicles.
 

Hamoud Abdullah AlTheeb and Mohammed Ahmed Abdullah Al-Theeb are the largest shareholders in the company after the IPO, at 23% each.

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