 "Lulu Retail Holdings set to launch $1.8-bn IPO; largest in UAE for this yr")
Lulu Retail Holdings, which runs West Asia’s biggest hypermarket chains, is set to launch next week a $1.8 billion initial public offering (IPO), the largest in the United Arab Emirates (UAE) this year and the largest ever by a private firm.
The company, controlled by Kerala business tycoon MA Yusuff Ali, will offer more than 2.58 billion shares through the IPO, which will start on October 28 and close on November 5. The shares are expected to start trading on the Abu Dhabi Securities Exchange on November 14.
Though the India business is not part of the listing entity, the company in its prospectus has mentioned that a good share of its sourcing comes from India. In September, Ali said the quantum of agri-product procurements from India is expected to increase from Rs 10,000 crore to Rs 15,000 crore in the next two years. These products majorly include fruits, vegetables, rice, tea, sugar, spice and millet.
Currently, the group sources products from suppliers from 85 countries. As of June this year, approximately 82 per cent were domestic (GCC) purchases, and about18 per cent were international purchases (direct imports and imports from sourcing centres). The group’s top three sourcing countries for imports, excluding GCC countries, were India (20 per cent), China (20 per cent) and the USA (10 per cent).
"Lulu Retail, which is the retail entity, is a cash-rich company. We have sufficient funds to support our growth plans. The proceeds are resting with the offloading company Lulu International Holdings Ltd (LIHL) and they might use it as per the business strategy," a company spokesperson told Business Standard.
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"The retail market in the region is expected to reach $100 billion by the end of 2028 and we are well positioned to grab those opportunities," he added.
The company has 240 stores across six countries in the Gulf Co-operation Council (GCC). The listing comes at a time of retail spending boom in the GCC region, reportedly leading to domestic listings by companies in the sector.
Ali sold a 20 per cent stake in LIHL for reportedly around $1 billion to the Abu Dhabi Developmental Holding Company (ADQ) in 2021.
Number of daily shoppers for the company is around 657,749 in 2024, up from 613,978 in 2023.
"We already are an omnichannel player and we see a great potential in it going forward. Will look to increase our presence in online platforms. Our outlook is much brighter," said the company spokesperson.
Founded in 1974 by Ali, Lulu reportedly joins other grocery firms that have listed such as UAE-based Spinneys this year, and Saudi grocery retailer BinDawood Holding in 2020.
The group globally has a presence in manufacturing and trading of goods, hospitality assets, and real estate business, in addition to operating shopping malls.
The group as a whole has reportedly massive expansion plans in India, including an investment of Rs 30,000 crore by 2025. It already has supermarkets in India, including in Kochi, Bengaluru, Lucknow, Coimbatore, Trivandrum, Palakkad, Hyderabad and Calicut.