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Saudi online retailer Nice One Beauty Digital Marketing closed at a 30% high on Wednesday, signalling growing investor appetite for the kingdom’s beauty and lifestyle sector, according to analysts.
Shares in the Saudi unicorn opened at 38.50 riyals ($10.26), 10% higher from the set price of SAR 35 per share, at top of the range.
Early trade saw the shares soar 30% to SAR 45.50, the maximum-permitted limit set by Tadawul during the first three days of newly listed stock and remained there until closing.
“On its debut, around 550,000 Nice One shares were traded, with a total value of SAR 25 million, highlighting high demand,” Vijay Valecha, Chief Investment Officer, Century Financial told Zawya.
“The stock performed well, most likely riding on confidence found by way of strong intuitional player commitments and high demand from both retail and institutional investors. The growth of Saudi Arabia’s beauty market, along with good market conditions, likely drove the stock to its maximum price increase on the first day. Moreover, the local bourses have a history of first-day profits or share price surges,” he said.
Nice One’s SAR 908 million IPO was oversubscribed 139.4 times, implying a market capitalisation of over SAR 4 billion.
The company offered a free float of 34.65 million shares, representing 30% of its share capital, with 10% allocated to retail investors and 90% to institutions.
Masarrah Investment Company, Mohammed Abdulaziz Al Habib & Sons and Frontier Investment Management Partners were named cornerstone investors, with commitments of up to 12% of the IPO.
Valecha said the success of Nice One’s $320 million IPO highlights strong investor appetite for Saudi IPOs in the wake of Almoosa Health's trading debut a day earlier.
According to him, Nice One's debut also signals a growing interest in the beauty and lifestyle retail sector.
EFG Hermes KSA and SNB Capital are joint financial advisors, bookrunners, and underwriters. SNB Capital serving as lead manager.
(Writing by Bindu Rai, editing by Seban Scaria)
