Saudi car rental company aims for $290m from IPO

Saudi-based car rental company Lumi is likely to raise up to SAR1.089 billion ($290 million) after announcing the price range for its initial public offering (IPO) on the Saudi Exchange (Tadawul).

The wholly-owned auto rental subsidiary of Riyadh-listed Seera Group Holding set the price range between SAR62 and SAR66 per share, giving the company a valuation of between SAR3.41 billion and SAR3.63 billion.

The institutional book-building period, which began on Wednesday, will end on September 5. The final offer price is expected to be announced on September 7.

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The retail subscription will open for one day on September 12.

Lumi expects to issue 16.5 million shares, with the listing taking place following regulatory approvals.

Saudi Fransi Capital has been appointed financial advisor, lead manager, bookrunner and underwriter.

Lumi chairman Mohammed Al Khalil said: “The IPO provides an opportunity for investors to participate in a sector that is benefitting from powerful macroeconomic and structural tailwinds and is positioned for significant growth.

“With our own growth accelerating, this is an exciting time to invite investors to share in our onward journey of success.”

Lumi reported a profit of SAR100 million in the first half of 2023, rising 39 percent from SAR72 million in the same period last year.

Revenue rose 48.6 percent year on year to SAR500 million in the first six months to June 30, 2023.

The company’s fleet grew to 24,730 by the end of April from more than 19,600 at the end of September 2022, the prospectus said.

Saudi Arabia’s car rental market is forecast to rise at a compound annual growth rate of 8.6 percent up to 2027 to reach SAR 9.8 billion, according to Glasgow Research & Consulting data