The IPO fever in Saudi Arabia shows no signs of slowing down. After announcing ACWA’s public offering, which is set to become the biggest Saudi IPO of the year, the Tadawul will also welcome Nayifat Finance. The Saudi lender will offer 35 million shares, representing 35% of its share capital. Nayifat Finance is a non-banking financial institution (NBFI) offering Sharia-compliant products such as consumer finance, credit cards, and SME financing. HSBC (HSBC) will be the lead financial advisor and bookmaker for the company’s IPO.
Nayifat Finance will use the funds raised from the IPO to expand into FinTech and consolidate its position in the NBFI sector. As of the first quarter of 2021, the company amassed a portfolio of over 44,000 clients. Nayifat Finance was also the first NBFI company in Saudi Arabia to issue Visa (V) credit cards in 2020.
why it matters
Currently, Saudi Arabia's NBFIs are highly dependent on borrowing and securitization as the main source for financing their lending activities. Nayifat Finance's flotation will open up a new revenue source that other NBFIs may wish to follow to raise funds for their operations.