Lulu listing at ADX on November 14; bumper gains expected

The share price of the Lulu Group led by noted Malayali entrepreneur Yusuff Ali M A is expected to witness bumper gains on the listing day. The deadline to subscribe for the company’s IPO ends on November 5 and the final price will be announced on November 6. The listing will take place at Abu Dhabi Securities Exchange (ADX) on November 14.

Lulu’s IPO (initial public offering) received over 100 per cent subscriptions within hours of its launch on October 28, and considering the huge demand; the company increased its equity sale from 25 to 30 per cent.

While Lulu had initially offered 258.2 crore shares, it has now decided to sell another 51.6 crore shares, taking the total number to 310 crore shares. However, the additional five-percent equity has been reserved for institutional investors and this decision is expected to lead to a surge in the share price during listing.

Lulu’s retail shares were priced at UAE Dirhams (AED) 1.94-2.04 in the IPO and the highest price band of AED 2.04 (around Rs 46.49) is likely to be the cut-off (final) price during listing. Financial experts said that applicants who subscribed at this price could receive allotment.

Alerts regarding the allotment will be sent to investors by SMS on November 12. Refunds for applicants who failed to receive allotment and for investors who did not receive the applied number of shares would be given on November 13, followed by the listing on November 14. Meanwhile, Lulu Group has assured retail investors of a minimum 1,000 shares to each allottee.

While investment firms have a 180-day lock-in period, retail investors and eligible employees of Lulu Group can buy and sell the company’s shares from November 14. Applicants who failed to receive allotments are expected to approach ADX on that day for Lulu’s shares, said experts.

However, a majority of investors will hold the company’s shares for long terms, with the goal of achieving big returns and there are little chances for sales to take place on the listing day, added the experts. According to them, the decision of first-time investors would be crucial in this regard, as established investors could prefer to add Lulu’s shares to their portfolio.