Saudi Arabia Commands Nearly 80% of GCC IPO Proceeds in 2025 Amid Sector Gains

The Kuwait Financial Centre (“Markaz”) report reveals a pronounced slump in GCC IPO proceeds in 2025. At just $5.1 billion raised, this represents a steep ~61% fall from the previous year’s $13.2 billion despite issuing fewer IPOs—40 in 2025 vs 53 in 2024. This trend mirrors global cooling in IPO markets, where both macroeconomic headwinds (interest rates, geopolitical risk) and local sectoral challenges are weighing on investor appetite.

Saudi Arabia’s dominance is unmistakable. With $4.1 billion in IPO proceeds, the Kingdom accounted for nearly four-fifths of GCC total IPO capital in 2025. Within that, the bulk came via its Main Market on Tadawul ($3.7 billion through 13 IPOs), while its Nomu parallel market added $336 million via 23 offerings. This implies a strategic preference among larger issuers for the Main Market, even as smaller or riskier ventures migrate to the parallel platform.

Sectorally, the Industrials sector—especially flynas—was the standout in terms of capital raised. flynas alone accounted for over half of the industrial sector’s proceeds. Real Estate also remained significant, driven by multiple domestic IPOs, underscoring sustained investor interest in property-related assets. Healthcare, however, while smaller in volume, showed selective strength with offerings from SMC Hospitals and others.

Yet, IPO performance was mixed. While some IPOs like Ratio Speciality Co. saw extraordinary gains (190% post-list), others suffered heavy losses, particularly in sectors under margin pressure or with limited liquidity. This indicates bifurcated investor sentiment: aggressive risk/reward at the premium end versus caution elsewhere.

Broader market reactions diverge: Saudi Arabia’s overall index dropped 12.8% in 2025, signaling investor concerns or perhaps overvaluation, while smaller GCC markets like Oman and Kuwait saw strong gains (28.1% and 25.3% respectively), suggesting regionally important, but lesser-capitalized, markets may be benefitting from rotation. The outlook for 2026 appears cautiously optimistic, contingent on stable global rates and continued private sector participation in listings.

Strategic implications:

• Saudi Arabia must address index underperformance and investor confidence to sustain IPO momentum.
• Regulators and exchanges in GCC may need to enhance parallel market infrastructure/liquidity or encourage Main Market pathways for growth firms.
• Diversification of IPO deal structuring, perhaps via partial divestments of state-related entities, could be a way to boost supply and broaden investor base.
• Smaller Gulf economies might strategize to capture spillover IPO activity, offering attractive valuations or regulatory incentives.

Open questions:

• What is the composition of the IPO pipeline for 2026 in terms of sectoral mix, size, and number—will the next year mirror 2024 or 2025?
• Can Saudi Arabia stabilize its market index, perhaps via policy measures to improve transparency, reduce volatility, or increase foreign participation?
• How sustainable are flynas-level large-scale industrial IPOs—are investor expectations for returns tempered or realistic?
• To what extent will macro factors (oil prices, interest rates, regional geopolitics) continue to constrain IPO activity versus local regulatory reforms (e.g., governance, investor protection)?