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Rasan Information Technology's Landmark Fintech IPO Aims for $224 Million in Saudi Market

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Lauren Miller

May 12, 2024 - 09:40 am

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Rasan Information Technology Co. Eyes Ambitious Market Debut with $224 Million IPO

(Bloomberg) -- In a pioneering move for the financial technology scene in Saudi Arabia, Rasan Information Technology Co., together with its stakeholders, are gearing up for a significant market debut. The company aims to amass up to 841 million riyals (approximately $224 million) in what stands as one of the premier initial public offerings (IPOs) dissecting the fintech sphere within the kingdom.

Setting the Stage for a Landmark Offering

A statement released on a serene Sunday announced the establishment of the share price bracket, a deliberate mark set between 35 riyals and 37 riyals per share. In this poised Riyadh IPO, Rasan intends to issue 5.3 million new shares to the public, while existing shareholders are preparing to offer another 17.4 million shares. With this, the operator of the well-regarded insurance platform Tameeni is looking at a valuation that could soar up to 841 million riyals in the course of the offering. Institutional investors are encouraged to direct their attention to the bookbuilding process, slated to run until May 16.

A Thriving Hub for IPOs

Rasan proudly stands as the fourth enterprise to take the leap into IPO territory in Saudi Arabia in recent weeks alone. The kingdom’s stock exchange is witnessing a flurry of activity and anticipates this trend to persist, as highlighted by the stock exchange's chief executive officer last Thursday. More than 10 companies are reportedly queuing up in anticipation of their IPOs.

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For additional insights into the burgeoning series of IPO endeavors within the Saudi stock market: Saudi Stock Exchange CEO Sees Further Blitz of IPOs

Investor Enthusiasm Sustained in a Robust IPO Market

Recent IPOs have met with a warm reception from investors, indicating a sustained hunger for new share offerings in what has materialized as an industrious marketplace for IPOs over the last few years. A notable mention is the hospital group Dr. Soliman Abdul Kader Fakeeh Hospital, which is shaping up to be the kingdom's premier IPO of 2024, remarkably sold out in under one hour. Meanwhile, the institutional investor appetite for water treatment leader Miahona's offer was overwhelming, with coverage skyrocketing to 170 times over.

The Dawn of Technology Sector Listings

Despite the prolific IPO scene, the kingdom's technology sector has not frequently graced the listings. A rare instance was observed with the food delivery titan Jahez's IPO in late 2021, which was met with remarkable demand, becoming heavily oversubscribed.

Presently, alongside Rasan, other technology firms such as the buy-now-pay-later service Tabby and the online cosmetics shop Nice One are setting their sights on IPO ventures, according to reports from Bloomberg News. Taking a page from its Gulf counterparts, Saudi Arabia is on a mission to inject diversity into its stock exchange, which has traditionally been monopolized by the banking and industrial sectors.

Rasan at a Glance: A Beacon in Fintech Innovation

Spawned in 2016, Rasan has swiftly climbed the ranks to become the largest insurance aggregator in the kingdom, boasting robust platforms such as Tameeni and Treza under its belt. The year 2023 was a testament to its success, with the company reporting revenues of 256 million riyals and a net income reaching 46 million riyals—a remarkable feat underscoring its ascendant trajectory in the fintech domain.

Financial Maestros Spearheading the IPO

Undertaking pivotal roles in the orchestration of Rasan's IPO, Saudi Fransi Capital and Morgan Stanley have stepped forward to offer their expertise. These eminent entities have been entrusted with the critical responsibilities as joint financial advisers, bookrunners, and underwriters, a clear indication of the high-level support bolstering the offering.

With assistance from renowned financial correspondent Omar Tamo, the forthcoming steps in Rasan's journey towards IPO laurels are monitored with intense interest. The move comes amid a dynamic phase in the Saudi financial market, where the technology sector is primed for a flourish of public interest and investment. As Rasan navigates these pivotal waters, the potential for a ripple effect is palpable—one that may catalyze a wave of similar tech-oriented IPOs, reshaping the financial topography of the Saudi Arabian stock exchange.

Marking a historic moment for the fintech industry in the heart of the Middle East, Rasan's anticipated IPO underscores the transformative leaps the kingdom is making in the financial and technological realms. It is these strategic economic expansions and diversifications that mirror Saudi Arabia's overarching aspirations, as per Vision 2030, to fortify its standing as an influential global economic powerhouse.