Lumi, the Saudi Arabian car rental firm, has enlisted corporate finance consultants to assist with its upcoming public listing.
Declared in December of the previous year, Lumi aims to go public to finance its expansion goals. The company submitted its request to the Saudi Arabia Capital Market Authority (CMA) and, earlier this month, obtained approval for its initial public offering (IPO) on the Tadawul exchange, Saudi Arabia’s primary stock market.
Although the exact date of Lumi’s debut on the exchange remains undisclosed, it is known that companies with CMA approval have a six-month window to initiate their public share sale.
Established in 2017, the well-known Saudi car rental company Lumi provides a range of vehicle options, including trucks, SUVs, and sports vehicles for both economy and luxury segments. Lumi’s fleet consists of 19,000 vehicles, and it operates from 25 locations across Saudi Arabia, including nine airports. The company also offers chauffeur services and runs a business that sells used vehicles to customers.
Lumi’s parent company, Seera, a major player in the nation’s tourism and travel industry, revealed in a bourse filing that 30% of Lumi’s share capital would be offered via the issuance of 16.50 million ordinary shares.
Saudi Fransi Capital, the financial advisor and joint bookrunner, alongside EFG Hermes, the joint bookrunner, have been appointed to manage the IPO process. The identities of other consultants participating in the transaction, including financial, legal, and communication advisors, remain undisclosed.
Glasgow Research & Consulting’s analysis suggests that the Saudi Arabian car rental market will experience a compound annual growth rate of 8.6% until 2027, reaching a market size of 9.8 billion riyals ($2.6 billion).
Lumi intends to use the anticipated capital infusion to enhance its market share by entering new markets and expanding its business lines.
Azfar Shakeel, CFO of Lumi, stated, “Our goal is to maintain our market leadership through innovative services that cater to the needs of our expanding clientele, including government clients, corporations, families, and individuals.”
He added, “Central to our plan is Lumi’s commitment to offering innovative services that not only revolutionize the car rental industry but also provide exceptional lifestyle experiences for our customers.”
IPOs in the region
Lumi’s upcoming listing joins a series of flotations in the Middle East during a period of global IPO market stagnation. This contrary trend reflects positive sentiment among regional investors and the overall stability and economic progress of the Middle East. Companies in the region are increasingly recognizing the benefits of going public as a means of raising funds and expanding their operations.
Earlier this month, Al Ansari successfully listed in Dubai (valued at $2.1 billion), while in March, Abu Dhabi witnessed a massive listing as Adnoc Gas raised $2.5 billion.
Middle Eastern companies raised $21.9 billion via IPOs in 2022, accounting for over half the total for the broader Europe, Middle East, and Africa region, according to Dealogic data.
Dealmakers anticipate the IPO trend to persist this year, as more companies in the region explore the possibility of going public to support their expansion plans, partly motivated by large state privatization agendas.
