Islamic Finance

Shariah-compliant Nayifat Finance to proceed with IPO on Saudi stock exchange

Shariah-compliant non-bank financial institution Nayifat Finance is planning an initial public offering (IPO) on the main market of Tadawul, the Saudi stock exchange.

The Riyadh-based company will offer 36.5 million shares, equivalent to 30.041 percent of its share capital.

Net proceeds from the IPO will go towards company expansion, the company said in a statement on Monday.

Nayifat CEO Abdulmohsen Al Sowailem said the “key pillars” of the company’s expansion are consumer finance and growth in SME financing and credit card products.

100 percent of the shares will first be offered to institutional investors, and the final number allocated to this tranche will be adjusted based on subscriptions from individual investors.

Institutional book-building will run from June 24 through July 2 and final allotments will be made no later than July 23.

NCB Capital Company is financial advisor, sole bookrunner, underwriter and lead manager. Falcom Financial Services serves as co-financial advisor.

Nayifat says it has a client base of 250,000 and a financing book of more than 40,000 borrowers.

Its gross asset portfolio was 2.23 billion riyals ($595 million) as at March 31.

Its Shariah-compliant financing solutions are based on tawarruq, murabahah and ijarah.

Net income stood at 172.4 million Saudi riyals ($45.9 million) in 2018.

Nayifat’s current shareholders are Falcom Holding Company, which holds a 71.68 percent stake, the chairperson Saud Huwaimel Farraj Al Dosari owns 7.58 percent, and Abdulaziz Saud Omar Al Blehed 7.04 percent. They will not receive any proceeds from the IPO.

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