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Saudi Health Giant's IPO Shatters Records with $91 Billion in Bids


Benjamin Hughes

May 14, 2024 - 06:52 am


Saudi Hospital Group's Record-Breaking IPO Draws $91 Billion Orders

In a groundbreaking move that has captured the attention of the financial world, an esteemed Saudi Arabian hospital network has achieved an unprecedented level of interest in its initial public offering (IPO), marking a significant milestone for the kingdom’s burgeoning healthcare sector.

Massive Interest in Healthcare Giant

Investors have rallied with enthusiasm, placing orders worth a staggering 91 billion dollars for the initial public offering of the notable Dr. Soliman Abdul Kader Fakeeh Hospital (DSFH), based in Riyadh. With institutional investors alone, the offering was oversubscribed by an astonishing 119 times, as indicated by a statement this past Tuesday. The forthcoming listing, anticipated with high expectations, is poised to crown itself as the most considerable IPO in the country for the current year.

The culmination of this monumental IPO will see both DSFH and its founding family reaping the financial benefits of a 2.86 billion riyals, equivalent to roughly 763.4 million dollars in total proceeds. It sets a pivotal example for the healthcare industry within the region, showcasing the flourishing investment environment the kingdom offers, especially in the private healthcare sector.

Striking the High Notes

At the heart of excitement and speculation, the closing share price was firmly set at 57.5 riyals. This price anchors at the higher boundary of the initially marketed scope, projecting a total market valuation amounting to 13.3 billion riyals for the hospital enterprise. Investor appetite was clear as the offer encountered a rapid sell-out soon after the opening of order books earlier this month, illustrating the deep-seated confidence in the growth trajectory of DSFH.

A Surge in Initial Public Offerings

DSFH finds itself in good company, as it is one of four Saudi corporations to declare IPO intentions in recent weeks. The landscape is abuzz with activity as the local bourse anticipates an unrelenting surge of entries to the market; in fact, more than ten additional firms are arrayed at the gates, readying for their public debuts, stated the CEO of the kingdom's stock exchange just last week.

Read More: Saudi Stock Exchange CEO Sees Further Blitz of IPOs

Cornerstone Investors Signify Confidence

The trust in Fakeeh Care Group's financial prospects is aptly highlighted by the cornerstone investments made by prestigious entities like Abu Dhabi Investment Authority and Olayan Saudi Investment Company, who have respectively consented to subscribe for 1.04 million and 1.96 million shares. Of significant note is the participation from the Abu Dhabi sovereign wealth fund, which is embracing the role of a cornerstone investor in a Saudi IPO for its premier instance.

The Path of Expansion and Growth

The DSFH's history traces back to 1978, burgeoned in the bustling city of Jeddah. Since its foundation, the hospital group's influence and capacity have only soared, now boasting ownership of 835 beds spread across four fully functional hospitals, along with five medical centers. Guided by an ambitious 10-year plan, the Group eyes a dramatic expansion – the blueprint includes augmenting their facilities to seven hospitals and nine medical centers by 2028.

This strategic expansion is devised to dovetail with the demographic surge of Saudi Arabia's population, which is projected to swell to approximately 40 million by the year 2030. The compelling growth strategy, underpinned by such ventures, is central to the rationale behind the proceeds generated from this remarkable IPO. The capital accrued is destined to fuel the Group’s mission to elevate healthcare provision and facilities across the kingdom.

Upcoming Retail Offering and Advisory Professionals

Eager individual investors can mark their calendars for May 21, when the retail offering window flings open for a concise two-day interval. A consortium of global finance powerhouses underscore the significance of the IPO, with HSBC Holdings Plc assuming the mantle of the sole financial adviser. Simultaneously, the institution shares the role of joint bookrunner with the likes of anb capital and EFG Hermes, exemplifying the weight of the international collaboration behind DSFH's public market entry.

Furthermore, the highly regarded advisory firm Moelis & Company is providing its seasoned counsel to the selling shareholders, fortifying the deal's architecture and ensuring a smooth progression towards the much-anticipated public offering.

Conclusion: A Visionary Horizon for Healthcare in Saudi Arabia

The indomitable spirit of the Dr. Soliman Abdul Kader Fakeeh Hospital Group’s success is emblematic of the undeterred growth and potential within Saudi Arabia’s private healthcare industry. As international investors eagerly open their wallets, the echoes of this resounding IPO send a clear message: the kingdom’s healthcare sector is fertile ground for unprecedented development and innovation. This landmark listing not only galvanizes the future of healthcare services in Saudi Arabia but also potentially catalyzes a richer, more varied ecosystem of public offerings to come—a beacon for upcoming enterprises seeking to traverse the public terrain.

Overall, the triumph of the Fakeeh Care Group’s IPO represents a monumental moment not only for the company itself but also for the future landscape of healthcare investment in the Kingdom of Saudi Arabia. Driven by a clear strategic vision and backed by substantial investment interest, the robust demand for the DSFH shares signals an era where thriving private entities can look forward to even broader horizons and unprecedented opportunities in an agile and supportive market.

As the global investment community looks on, the remarkable turnout for DSFH’s IPO sets a new benchmark in the Middle East healthcare sector. It is a testament to investor confidence in the management's vision and the rich potential that awaits in the dynamic Saudi Arabian market.


The information contained in this article is based on sources believed to be reliable, including Bloomberg L.P. ©2024 Bloomberg L.P. as the primary source of the statements and data presented. The details provided come with no warranty as to their absolute accuracy or completeness and are subject to change without notice. Investments involve risk, and neither DSFH nor any of the investors or advisors involved in this IPO can guarantee future results based on this listing's extraordinary early achievements.

The information disseminated through this news piece reflects the current standings and anticipations regarding the groundbreaking IPO of the Dr. Soliman Abdul Kader Fakeeh Hospital Group as it moves to cement itself as a healthcare titan within the vigorously expanding market of the Kingdom of Saudi Arabia.

For further information, inquiries, or detailed financial evaluations, please reference Bloomberg's full article:

Saudi Hospital Group’s Listing Draws Big Interest

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