Retail subscription to Saudi Home Loans IPO starts today

27/03/2022 Argaam Special
Logo ofSaudi Home Loans Co.

Logo of Saudi Home Loans Co.


Retail investors will start today, March 27, subscription to Saudi Home Loans Co.’s (SHL) about 3 million shares, or 10% of total shares offered, at SAR 20 each, as set by the book-building process. 

 

The Capital Market Authority (CMA) approved in December 2021 the company's request to float a 30% stake, or 30 million shares in an initial public offering (IPO). 

 

The retail tranche subscription process will run for three days until March 29. 

 

The company’s institutional offering, which ended last week, was 50x covered. 

 

This will be the seventh listing on the main market in 2022, after East Pipes Integrated Company for Industry on Jan. 24, Scientific & Medical Equipment House Co. on Jan. 31, Elm Co. on Feb. 3, Al-Dawaa Medical Services Co. on Feb. 27, Al Masane Al Kobra Mining Co. (AMAK) on March 9, and Nahdi Medical Co. on March 13.

 

Last year witnessed nine listings, including Alkhorayef Water and Power Technologies Co. on March 1, Theeb Rent a Car Co. (March 29), Tanmiah Food Co. (Aug. 4), solutions (Sept. 30), ACWA Power (Oct. 11), Arabian Contracting Services Co. (Nov. 15), Nayifat Finance Co. (Nov. 22), Saudi Tadawul Group (Dec. 8), and Almunajem Foods Co. (Dec. 20).

 

Company Profile 

 

Saudi Home Loans Company is a Saudi closed joint stock company established in 2007 and headquartered in Riyadh. The company is also licensed by the Saudi Central Bank (SAMA) to conduct real estate financing in Saudi Arabia.

 

The company's current capital is SAR 1 billion, divided into 100 million shares of equal value.

 

The company has two branches, one each in Al Khobar and Jeddah, in addition to the headquarters in Riyadh.

 

The branch in Al Khobar operates as a marketing center, under the license of the General Investment Authority. The Jeddah branch operates in real estate financing.

 

SHL is a leading Islamic real estate finance companies in Saudi Arabia, providing solutions to the retail sector under the supervision of a Shariah-controlled body of experts, to ensure the legitimacy and compliance with Islamic law.

 

SHL’s main business is based on the real estate finance activity for individuals, in accordance with the Real Estate and Rental Finance Law and the Finance Companies Control Law and its Implementing Regulations and related regulations and the rules and instructions issued by the competent authorities.

 

The company carries out and implements financing and purchasing homes, residential lands, and apartments in Saudi Arabia; financing real estate that is developed by companies working in the field of real estate development; and financing the establishment of commercial and industrial projects.


SHL’s activities also include securing and managing the transferred assets of the owners and third parties as a security. It is also entitled to sell and buy real estate for the financing purposes, for which the company was established, with the exception of Makkah and Madinah.

 

The company aims to boost its returns at a steady and balanced pace, which will contribute to consolidating its position and leading role in the Kingdom's real estate finance sector.

 

The company's future plans include developing products and services, building a large and stable customer base, developing risk management, digital transformation, and increasing brand awareness. 

 

SHL targets different categories of retail clients, citizens as well as residents, if they obtain the necessary approvals from the relevant authorities. 

 

It is also working on launching a self-construction product (retail and commercial financing), in addition to new products for 2022 such as mortgage in Murabaha form and a financing product for land and loan. 

 

Company’s Properties:

 

SHL owns real estate proven with more than 7,000 title deeds. Title deeds are recorded as collateral for loans made to the company’s clients. The number varies from time to time based on new clients and loan payments.

 

Given that SHL is a mixed company, it cannot own real estate within Makkah and Madinah. Therefore, it entered into an agreement with Kingdom Installment Trading Co. (KIC).

 

The company entered into three lease agreements related to real estate used as its branches, as follows:

 

Lease Contracts

Location

Lessor

Date

Term of Contract

Annual Rent (SAR ‘000)

Offices No. 203, 304, 303, 104, 103, 004 and 003 Al-Murabba Towers Building, Madarat AlMurabba District, Riyadh

Tharwat Al-Osoul Company

Jan. 1, 2020

1 year

2288.9

Building No. 1, Showroom No. 1, 2, 3, 4, 5, Al Rehab, Jeddah

Hessa Mohammed Al-Adl

Dec. 29, 2013

4 years

500.0

Al-Tuwairqi Tower, Showroom No. 2

Sukoon Real Estate Company

Dec. 4, 2012

7 years

323.4

 

Company Profile

Company

Saudi Home Loans Co. (SHL)

Market

Saudi Exchange (Tadawul)

Core Activities

Housing and real estate finance

Capital 

SAR 1 bln

Number of shares

100 mln shares

 

IPO Summary

Issue percentage (%) 

30% 

Offer price  

SAR 20 

Number of shares offered for retail investors  

3 mln shares, or 10% of total shares offered

Qualified subscribers 

- Retail investors 

IPO minimum limit for retail investors 

10 shares 

IPO maximum limit for retail investors 

250,000 shares 

Retail subscription period 

3 days (March 27 to March 29)

Final allocation 

March 31

Surplus refund 

April 6

 

Special Information

Financial advisor, lead manager, underwriter and book runner

Riyad Capital

Receiving banks

Riyad Bank, Al Rajhi Bank, Arab National Bank 

 

Arab National Bank (ANB) will be the largest shareholder in SHL following the IPO, with a 28% stake, followed by Dar Al Arkan Real Estate Development with a 10.5% stake.

 

Company Shareholders

Shareholders

Before IPO

After IPO

Number of shares

(mln shares)

Ownership (%)

Number of shares

(mln shares)

Ownership (%)

Arab National Bank

40.00

40%

28.00

28%

Dar Al Arkan

15.00

15%

10.50

10.5%

Kingdom Installment Co.

9.00

9%

6.30

6.3%

Yousef Al Shelash

8.00

8%

5.60

5.6%

Hathlool bin Saleh Al hathlool

6.00

6%

4.20

4.2%

Tareq Mohammed Al Jarallah

6.00

6%

4.20

4.2%

IFC

5.00

5%

3.50

3.5%

Abulatif bin Abdullah al Shelash

5.00

5%

3.50

3.5%

Inma Almadaen Co.

4.00

4%

2.80

2.8%

Daem Al Khaleej Co.

2.00

2%

1.40

1.4%

Public

--

--

30.00

30%

Total

100.00

100%

100.00

100%

 

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