DUBAI - Saudi Arabia's Alsulaiman Group is weighing an initial public offering of its IKEA business franchise next year and has hired Moelis & Co as an adviser, two sources told Reuters.

The company plans to invite investment banks early next year to pitch for roles in a possible public share-sale, said the sources, who declined to be identified as the matter is not public.

Deliberations are at an early stage and it was not immediately clear how much the company is seeking to float or raise from a deal, the sources said.

Alsulaiman Group did not respond to a request for comment when contacted by Reuters on Wednesday. Moelis declined to comment.

IKEA entered Saudi Arabia in 1983 through family business Alsulaiman Group, which owns and operates the franchise for the Swedish furniture maker in Saudi Arabia and Bahrain.

Saudi Arabia is encouraging more family-owned companies to list in a bid to deepen its capital markets under reforms aimed at reducing the kingdom's reliance on oil revenues.

The kingdom has had a surge in IPOs since it listed oil giant Saudi Aramco in a record $29.4 billion listing in 2019.

The Gulf is in the midst of an IPO boom, with issuers raising more than $15 billion from IPOs this year, according to Refinitiv data.

The region's IPO proceeds in the first half of the year exceeded European flotations, the data showed, even as global markets remained volatile because of Russia's invasion of Ukraine.

(Reporting by Hadeel Al Sayegh; Editing by Robert Birsel)