Shareholders are selling pro rata through the offer of 7.5m shares.

The company, which was founded in 1982, specialises in oud and perfumes as well as incense, essential oils and saffron with sales online and through a network of 286 stores. While most of its stores are located in Saudi Arabia it also has a physically presence in the UAE, Kuwait, Bahrain and Oman.

Oud, a fragrant oil derived from tree resin, is popular across the Middle East with the market in Saudi Arabia expected to see CAGR of 4% between 2022 and 2027 to reach SR1.3bn (US$346.5m).

For 2023, Al Majed saw net profit before zakat of SR156.9m off revenue of SR767m, up from net profit before zakat of SR132.9m off revenue of SR588.4m in 2022.

Perfumes form the largest source of revenue, accounting for 64% in 2023, followed by oud at 14.3%.

The listing follows Intelligent Oud for Trading which listed in October on the junior Nomu Parallel Market in a SR15.9m IPO.

Shares in the offer priced at SR49 and are down around 20% so far this year at SR36.90 on Monday giving it a market capitalisation of SR72m and representing around 13 times P/E on 2023 numbers.

The company is much smaller than Al Majed with 2023 net profit of SR5.4m off revenue of SR25.2m.

Al Majed claims a 5.2% share of the Saudi fragrances market based on 2022 total sales, putting it fourth behind unlisted Arabian Oud Company on 12.7%, Abdul Samad Al Qurashi Company with 9.4% and Deraah Perfume Company at 6.1%.

US-listed perfume and beauty business Coty has the fifth-largest share in the country at 2.5% with the remainder of the market relatively fragmented. Coty trades around 22 times P/E on both 2023 and 2024 numbers.

Books will close for Al Majed on August 29 with a retail offer of up to 20% running for one day on September 15.

Final allocations are expected by September 19 with refunds of excess subscriptions by September 24.

Expenses of the offering are estimated at SR25m.

Saudi Fransi Capital is running the deal.

Following the transaction the selling shareholders will be subject to a six-month lock-up.

The Saudi CMA approved the listing in June.

Source: IFR