First Saudi IPO of the year posts gains despite conflict

• Riyadh quarry company up by 14%
• Saudi market up 2% during war
• PIF IPO involvement expected this year

The first IPO on the Saudi stock exchange this year closed its debut session with a double-digit gain. 

Analysts say investor appetite for new listings remains intact, but deal activity is likely to slow while the US-Israel conflict with Iran continues.

Shares in Saleh Abdulaziz Al Rashed & Sons Co., a Riyadh-based quarrying and construction materials company, jumped more than 14 percent by close.

The surge came despite disrupted shipping and air travel and a wave of missile and drone attacks on Saudi Arabia in relation to the Iran war.

In an email to AGBI, the company’s CEO Saud Al Rashed said “our decision to list was driven by operational, financial and institutional readiness, not by short-term market timing”.

He declined to say if the threat of a prolonged conflict created a cause for concern for Saudi financial markets, saying only that he expects domestic demand for construction materials to grow in line with ongoing Saudi infrastructure and development projects.

The IPO, which raised $67 million, is equal in size to the smallest listing on the exchange last year, that of car rental company Cherry Trading, which began trading on 1 December. Saleh Abdulaziz Al Rashed & Sons Co.’s retail tranche was 161 percent oversubscribed.

Some 13 companies listed on the main market in 2025, raising an average of $300 million, with valuations dropping towards the end of the year.

Analysts have said they expect to see new listings in 2026, despite the poor performance of the Saudi Exchange last year, albeit at a slower pace.

The market fell 13 percent in 2025, but has since recovered some of those losses. Analysts expect fewer new offerings with smaller valuations.

“It looks like IPOs will be a bit delayed,” said Shahrukh Saleem, a portfolio analyst at asset manager Mashreq Capital, referencing the on-going conflict.

The Saudi Exchange has performed better than some of its regional peers since the start of hostilities. Saudi’s Tadawul All-Shares Index, which tracks the main market, has grown by 2 percent in that period.

“While it is not prudent to do an IPO until this current conflict ends or subsides, we still think there will be an appetite for good quality stocks at reasonable volumes,” said Nishit Lakhotia, group chief investment officer for equities at SICO Bank.

Four Saudi companies currently have permission from the Capital Markets Authority to launch an IPO: restaurant chain Alromansiah Company; IT company Dar Albalad For Business Solutions; contractors Mutlaq Al-Ghowairi Contracting Company; and developer AlDyar AlArabia Real Estate Development Company.

Developers and contractors in particular are looking to IPOs to raise growth capital to increase their share of a sector set to expand, despite cut backs to high-profile state-backed giga-projects.

The $1 trillion Saudi Public Investment Fund, which oversees those giga-projects, has indicated its intention to pull back spending and seek more investment from the private sector. 

Further reading:

• High hopes as Saudi exchange prepares to welcome foreigners
• Tadawul operator proposes dividend despite profit drop
• Almasar Alshamil plans Gulf expansion after $160m float

Analysts say that they expect the fund and its portfolio companies to play an active role in public markets this year.

Al Rashed said that the money raised from the offering would go towards expanding its production output.

Saleh Abdelaziz Al Rashed intends to develop new and existing quarries, grow its asphalt production and launch new silica exploration and extraction projects.

It will also look to broaden its customer base, he said, “to reduce concentration risk and serve a wider range of infrastructure, industrial and private-sector clients”.