From IPO boom to standoff: Saudi Arabia’s capital markets ambitions meet a reluctant investor base 

Saudi Arabia’s IPO market is currently grappling with its weakest performance in years.  

Just three companies—Dar Al Balad, Saleh Abdulaziz Al Rashed, and MSGA—have listed across Saudi Arabia’s Tadawul and its smaller parallel market Nomu so far this year, raising a combined $144 million.  

In comparison, Saudi companies raised $3.7 billion through share sales last year—more than across the rest of the Gulf combined. Some $9.8 billion was raised across the 17 companies that listed in 2022.  

The $144 million raised so far this year represents just 4% of the $3.53 billion raised through IPOs during the same eight-month period in 2025, when 25 companies went public, according to the Saudi Exchange 2025 Annual Report.  

The reluctance to issue has, in large part, been driven by a pricing standoff between company owners and investors. Owners are reluctant to list at valuations the market is prepared to accept, while investors are unwilling to pay higher prices after a year of losses on most new listings.  

Of the 17 companies that have gone public since 2025 on the kingdom’s main market, only four are trading above their issue price, Bloomberg data shows.  

Three planned Saudi listings from Mutlaq Al Ghowairi, Arabian Dyar, and Kesay Clinics have all been postponed this year while the six-month extensions granted to Alandalus Educational and Alromansiah have since expired.   

The ongoing U.S.-Iran war has added another layer of uncertainty, but the Saudi IPO market was already under pressure before the conflict began.  

Aside from the compression in market valuations, liquidity has weakened and investors have become more selective as the cost of capital and risk premiums have increased. 

The overall lacklustre performance has prompted Saudi’s market regulator, the Capital Market Authority (CMA), to propose a sweeping set of reforms in a bid to rejuvenate the Tadawul.  

Most notably, the regulator is proposing that the underwriting commitment takes effect when book-building begins. This means that underwriters would be required to purchase any IPO shares that investors fail to subscribe for, potentially leaving them responsible for the entire........

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