Saudi Arabia is gearing up for another initial public offering (IPO) with Derayah Financial Company planning to offer 20% of its shares. The final pricing will be determined through a book-building process.
This move is expected to contribute to another prosperous year for IPOs on the Saudi Tadawul. Established in 2009, Derayah is a digital investment platform providing brokerage and wealth management services. Since 2016, the company has seen a twelvefold increase in client accounts.
“Derayah is well-positioned as the financial sector in the Kingdom undergoes significant changes,” stated Taha Alkuwaiz, co-founder and Chairman of Derayah. Online trading and wealth management platforms are gaining popularity among Gulf retail investors, though few have transitioned to public trading.
Derayah’s Financial Highlights
As of mid-2024, Derayah’s assets under management reached SR15.1 billion, marking a 50% increase from the previous year. Public markets accounted for 65% of these assets, with the remainder in private markets. In 2023, the company generated SR624 million in operating income, resulting in a net income of SR330 million and a 53% profit margin.
Derayah is noted for being ‘cash-rich, debt-free,’ and operating a ‘capital-light balance sheet.’ CEO Mohammed Alshammasi highlighted the firm’s growth by meeting the needs of digital-savvy investors and simplifying the investment process.
In 2024, Saudi Arabia witnessed 42 IPOs, according to Kamco Invest. Of these, 14 were listed on the Main Market, raising SR14.2 billion, while the Nomu parallel market saw 28 IPOs, collecting SR1.1 billion. This was the highest annual number of IPOs compared to previous years.