LuLu Retail creates record, IPO generates demand exceeding $37 billion

LuLu Retail's Initial Public Offering has generated a demand exceeding $37 billion (approximately Rs 3.11 lakh crore), including from overseas investors in the United Arab Emirates. With this, LuLu Retail, owned by business tycoon M A Yusuff Ali's LuLu Group, has created a record demand for a private entity's IPO.

The IPO, which ended on November 5, had a final offer price of UAE Dirham (AED) 2.04 (Rs 0.56 or Rs 47.19). More than 82,000 retail investors sought LuLu's shares, setting another record. The IPO was oversubscribed 25 times.

LuLu Retail is eyeing $172 crore (Rs 14,500 crore) through the IPO, bypassing NMDC Energy's $87.7 crore (Rs 7,300 crore) record set early this year. Earlier, LuLu planned to sell 25 per cent of the shares held by LuLu Group, but the increased demand made it hike the shares on offer by five per cent (5.16 crore shares) to 30 per cent (310 crore shares).

The market capitalisation of LuLu Retail has been estimated to be $574 crore at the rate of AED 2.04 per share. This would come to Rs 48,377 crore. The IPO had received an investment offer of $27.3 crore (Rs 2,300 crore) from cornerstone investors. Among the cornerstone investors, Emirates International Investment Company would invest $10 crore (Rs 842 crore) in LuLu Retail.

Other investors are Saudi-based Massarah Investment Company, Abu Dhabi Pension Fund, Mumtalakat Holding Company of Bahrain, and Oman Investment Authority. Their investments would have a lock-in period of 180 days.

LuLu Retail will be listed in the Abu Dhabi Securities Exchange (ADX) on November 14, making it the 100th company on the list. Eligible investors will be notified via text message on November 12; others will be refunded on November 13.

LuLu on expansion mode
Meanwhile, the LuLU Group is planning a massive expansion in the  Gulf Cooperation Council (GCC) countries. It will open 100 additional hypermarkets in these countries in the next five years, and 91 of them have been finalised. Saudi Arabia will have priority when LuLu rolls out the new hypermarkets.

The LuLu Group has 240 stores and more than 50,000 employees in the GCC. The new stores will offer employment to thousands.