The Middle East IPO Boom Runs Out of Steam

After four years of remarkable growth, the Middle East's initial public offering (IPO) boom is showing clear signs of losing momentum. The shift follows a period where the Gulf region served as a rare global bright spot for listings. Recent months have seen a sharp decline in listing volumes, increased scrutiny of valuations, and a noticeable retreat in investor enthusiasm, particularly as IPO activity in markets like the US and Asia experiences a resurgence.

The change in sentiment is evident in recent market activity. Saudi Arabia’s EFSIM Facilities Management recently canceled its planned listing, valued at up to $89 million, on the kingdom’s main exchange. Concurrently, Saudi Arabia’s sovereign wealth fund has reportedly slowed work on several planned first-time share sales. These developments come against the backdrop of broader market weakness, with the benchmark Tadawul index dropping nearly 12% this year. While the Gulf had benefited from government privatization efforts and a push to deepen local capital markets, a dip in oil prices has begun to cloud the region’s growth outlook, impacting investor confidence in key markets like Saudi Arabia.

Quantifying the slowdown, regional listing proceeds more than halved in 2025, falling from $13 billion to under $6 billion. The UAE experienced a dramatic slowdown following the lukewarm debuts of Lulu Retail Holdings PLC and Talabat Holding PLC late last year, which made investors more cautious. As a result, Dubai-based online classifieds platform Dubizzle Ltd. postponed its share sale. Oman, which briefly outpaced London in IPO volumes in 2024, also saw activity dry up in the following year.

Despite the overall regional slowdown, Saudi Arabia maintained its position as the busiest listing venue in the Gulf, generating roughly $4 billion in proceeds. However, the composition of deals shifted significantly. Most activity originated from the private sector, as the government eased off on large privatizations. According to Mostafa Gad, head of investment banking at EFG Hermes, "Government IPOs are large tickets, this year the market was not for this," adding that "Postponing the big ones was a very wise idea."

The shift in investor appetite was also reflected in deal size. While 2024 saw three IPOs nearing $2 billion, driven by strong orderbooks that allowed companies like Talabat and Lulu to upsize their offerings, 2025 featured just one billion-dollar deal—from low-cost carrier Flynas—and only four transactions exceeding $500 million. Investors showed a distinct preference for smaller, simpler deals with clear financials. Gad noted that "Anything above $500 million starts to get difficult," and "People are not willing to navigate through a lot of complexity."

While IPOs slowed, follow-on offerings in the UAE filled the gap, climbing toward $5 billion and surpassing IPO proceeds for the first time. Much of this activity involved government-backed shareholders trimming stakes to boost free floats, liquidity, and index weightings. Even Qatar, which largely missed the initial share sale boom, saw rare activity in the form of a significant stake sale by the Abu Dhabi Investment Authority in Ooredoo. Saudi follow-on volumes were more muted compared to the previous year, which was dominated by the government's $12 billion sell-down in oil major Aramco.

Performance on debut day also changed dramatically. The substantial first-day jumps—often exceeding 30%—that characterized Gulf listings began to fade in late 2024 and evaporated in 2025. In Saudi Arabia, the average listing gain turned negative, and only two of the kingdom's ten largest IPOs now trade above their initial offer price. Broader market weakness, driven by softer oil prices and concerns over reduced government spending, compounded the issue. Investor demand suffered as well; a recent listing for Riyadh developer Al Ramz saw institutional investor books only 11 times covered, a steep drop from the triple-digit oversubscription levels that were commonplace just months earlier.

Although IPOs in the UAE fared slightly better, signs of fatigue appeared there too. Even state-backed deals, such as contractor Alec Holdings PJSC—historically reliable for strong debuts—traded tepidly on day one, achieving only a modest 3% gain. The instant double-digit listing gains were no longer guaranteed in either Dubai or Abu Dhabi's markets. For market participants like Gad, this correction represents a necessary step toward maturity. "Everyone will adjust to the idea that not all IPOs will perform 30–40% on day one," he said. "We’re becoming a mature market."