DUBAI - Saudi eyecare group Magrabi, which runs one of the largest chains of optical retail stores and eye clinics in the Middle East, is considering a flotation of its hospitals business next year and has hired banks for the deal, two sources familiar with the matter said.

Magrabi has mandated Rothschild & Co as financial advisor and HSBC as lead manager to run the initial public offering (IPO), said the sources, who declined to be named as the matter is not public.

Magrabi and HSBC did not immediately respond to a request for comment when contacted by Reuters on Wednesday. Rothschild declined to comment.

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.

Saudi Arabia's Middle East Healthcare Company, the company behind Saudi German Hospitals, raised $3.2 billion in 2019 when it sold 30% of the company in an IPO. Nahdi Medical, one of the largest pharmacy chains in the kingdom, raised $1.36 billion in March from its public share sale.

Founded in 1955 as an eye hospital in Jeddah, Magrabi runs more than 32 hospitals across the Middle East, according to information on its website. Magrabi says it was the first in the Middle East to perform a corneal transplant surgery in 1968.

Flush with cash from high oil prices, the Gulf region has become a bright spot for global equity capital markets this year, with government-led privatisation programmes leading to a surge of public share sales.

Gulf issuers have raised around $16 billion this year, accounting for about half of total IPO proceeds from Europe, the Middle East, and Africa, according to data from Refinitiv.

(Reporting by Hadeel Al Sayegh; Editing by Janane Venkatraman)