Abu Dhabi-based Lulu Retail, a well-known name in the hypermarket and grocery retail industry, is preparing to debut on the stock market with an IPO valued at approximately Rs 12,000 crore ($1.43 billion). The company, led by NRI businessman M.A. Yusuf Ali, aims to use the IPO proceeds to accelerate its expansion strategy across the Gulf region.
This move to go public is a significant step for Lulu Retail, which has become a dominant player in Middle Eastern retail and operates one of the largest hypermarket chains in the Gulf. The IPO shares will be listed on the Abu Dhabi Securities Exchange, bringing new investment opportunities for retail investors and strengthening Lulu’s presence in the Gulf.
Details of Lulu’s IPO and Price Range
Lulu Retail plans to sell 2.582 billion shares through this IPO, equivalent to 25% of the company’s total issued shares. The shares are priced between 1.94 to 2.04 dirhams per share, and the final IPO price will be announced on 5 November 2024. The offering is expected to raise around 5.01 to 5.27 billion dirhams ($1.36-1.43 billion).
Lulu International Holdings Limited, the parent company and sole shareholder, will be the entity offering these shares. Following the IPO, Yusuf Ali and his family are expected to retain a controlling 60% stake in Lulu Retail.
IPO Opportunity for Small Investors in the Gulf
This IPO is designed to be accessible to smaller investors, with retail investors able to start with a minimum of 1,000 shares, requiring an initial investment of Dh5,000. Investors can then increase their holdings in multiples of Dh1,000 shares.
With a large Indian expatriate community in Gulf nations such as the UAE, Kuwait, and Bahrain, Lulu Retail anticipates substantial interest from this demographic, which has a strong familiarity with the brand. The IPO aligns with Lulu’s goal of broadening its shareholder base and deepening community engagement across its operating markets.
Lulu’s Financial Performance and Growth
Lulu Retail has shown steady growth in recent years. In the first half of 2024, the company reported revenue of $3.9 billion, marking a 5.6% increase compared to the previous year. For the full year 2023, the revenue reached $7.3 billion, showing consistent performance across its Gulf markets.
Overview of Lulu Group’s Retail Network
Lulu Retail has established itself as a leading retail chain in the Gulf Cooperation Council (GCC) countries. As of August 2024, Lulu operates 240 stores across six countries, including the UAE, Saudi Arabia, Oman, Qatar, Kuwait, and Bahrain. This includes 116 hypermarkets, 102 express stores, and 22 mini markets, catering to diverse customer needs.
- Largest Presence in UAE and Oman: Lulu is the second-largest grocery retailer in the UAE and holds a dominant market share in Oman, Qatar, Bahrain, and Kuwait.
- Rapid Growth in Saudi Arabia: Saudi Arabia has been Lulu’s fastest-growing market, with the company’s extensive retail network expanding to 56 stores across the Kingdom.
Expansion in India and Other Global Markets
Yusuf Ali’s Lulu Group has a growing presence in India, with malls located in cities such as Kochi, Bengaluru, Lucknow, Coimbatore, Trivandrum, Palakkad, Hyderabad, and Calicut. The group continues to explore new avenues for expansion and investment within the Indian retail space, further solidifying its role as a leading international retail chain.
About Yusuf Ali and His Stake in Lulu Group
Yusuf Ali, originally from Kerala, India, founded Lulu Group and remains its majority stakeholder with an 80% stake in Lulu International Holdings Limited. In 2021, he sold a 20% stake in the holding company to Abu Dhabi’s ADQ (Abu Dhabi Developmental Holding Company) to facilitate further growth and partnerships.
