GCC IPOs Slow in 2025: What’s Reshaping Saudi & UAE Capital Markets

The once-roaring IPO boom in the Middle East, especially the Gulf Cooperation Council (GCC) region, is showing signs of marked cooling. Having raised approximately US$13 billion in IPO proceeds in 2024, driven by state privatisations and strong private sector interest, the region is now grappling with investor scepticism, reduced deal sizes, and lower valuations. [2] [8] Contracts on government-led IPOs and large floatings indicate reluctance from both issuers and sovereign wealth funds to commit in uncertain times. [4] [8]

One core factor is the resurgence of IPO activity elsewhere, particularly in the US and Asia. As global markets open up, the relative appeal of GCC listings diminishes—eschewed by investors seeking more liquidity, stronger regulatory frameworks, and proven governance in traditional financial centres. This has increased the threshold for what gets listed, putting pressure on mid-size or complex businesses to perform clearly or risk being postponed. [4]

Softer oil prices have exacerbated the trend. For oil-importing investors and domestic budget forecasts in Saudi Arabia and other Gulf states, lower energy revenues dampen both economic growth projections and discretionary government spending. When paired with weak first-day performance, the risk-reward balance shifts unfavourably for IPOs. [4] [12]

The shift in behavior is also evident in market structure changes: secondary offerings are replacing primary IPOs as the mechanism for raising and re-allocating capital in UAE markets. This suggests investors are still willing to transact but only under lower risk, higher certainty, and with less upfront volatility. [4]

Strategic Implications: Investment banks may need to focus heavily on structuring IPOs with conservative pricing, transparent financials, and strong sector stories to regain investor confidence. Governments considering privatizations must ensure local idxes are healthy, energy prices are affirmed, and legal/regulatory barriers are minimized. Meanwhile, companies may wait or delay, selecting timing carefully—potentially leading to pipeline delays into 2026.

Open Questions remain around whether this cooling is cyclic or structural. Will oil prices rebound enough to restore growth expectations? Can GCC markets adjust regulatory and disclosure frameworks to match investor demands? And will global headwinds—interest rates, trade policy, volatility—make traditional IPO hubs less attractive again?