Saudi Arabia’s IPO market is entering a more mature phase as listings mature and foreign investor involvement increases. But can it withstand the Gulf crisis?
Saudi Arabia has established itself as the Gulf region’s consistent destination for new company listings. While some regional exchanges occasionally produce blockbuster sales, the state has distinguished itself with a stable pipeline of offerings across all sectors and sizes of companies.
Last year, Saudi Arabia hosted 37 of the Gulf Cooperation Council’s 42 IPOs, through the Saudi Main Market and Nomu (the same market), according to Kuwait-based Kamco Invest. Nomu made the list at 24 while the Big Market saw 13 deals. Despite a slight dip in the flow of agreements from 2024, the total amount reached $ 4.2 billion. As a result, the kingdom surpassed the United Arab Emirates as the leading IPO market in the region.
As with other emerging economies, Saudi Arabia’s capital markets remain sensitive to the country’s development. The ongoing crisis following the US-Israeli attack on Iran in late February and the trade embargo through the Strait of Hormuz has increased uncertainty in all Middle Eastern markets.
But the extended record of the activity of the capital market continues to reflect both the level of the largest economy of the Gulf, and more than ten reforms of the financial sector that are in line with the development plan of the 2030 vision of the Saudi government.
As the government pushes to divest from hydrocarbons, the equity market has become an important platform for financing growth, increasing ownership, and attracting foreign capital.
“Today is the Tadawul All Share Index [TASI]following the Main Market, it includes more than 265 companies, alongside nearly 130 in the same Nomura market,” said Tarek Fadlallah, CEO of Nomura Asset Management Middle East.
While Saudi Aramco remains the benchmark, Fadlallah notes that the exchange now includes industries from technology and healthcare to transportation, retail, and real estate.
“Many of these companies are privately owned rather than government-controlled,” he adds, “which reflects the growing role of private companies in the Saudi economy. These changes position TASI as a more reliable vehicle to capture the story of Saudi Arabia’s structural growth.”
Underpinning the continued movement of the list is a comprehensive change in the infrastructure of Saudi Arabia’s financial markets.
“Three to four years ago, the Saudi IPO market was not as active or developed as it is today,” said a Riyadh-based banker. “Since then, we have seen the formation of a wider ecosystem, including many international banks establishing a strong local presence and connections with foreign investors.”
The machinery for bringing companies to market has also changed.
“Pre-IPO preparation is intensive, due diligence is very difficult, and book-building has become complex,” the banker said.
This change is closely linked to the Vision 2030 of the Financial Sector Development Program, which aims to deepen financial markets, expand financial channels, and encourage more listings of private companies. Regulators have also taken steps to gradually open the market to international investors. In February 2026, authorities removed the Qualified Foreign Investor requirement, allowing a wider pool of international investors to access Saudi equity more easily.
Demand for Domestic Currency Remains Surprising
Despite the changes and the growing interest of international investors, domestic investors remain the backbone of the Saudi IPO market. Local institutional investors, including asset managers, pension funds, and family offices, have strong demand for new listings while retail investors play a larger role than in many other emerging markets.
“Retail participation supported liquidity and domestic mutual funds and institutional investors,” said a Riyadh-based banker.
Foreign investors are however more active as Saudi Arabia becomes more closely linked to global financial markets. The milestone occurred when major benchmarks included Saudi Arabia in 2019, including the MSCI Emerging Markets Index and the FTSE Russell Emerging Markets Index. Saudi shares can fit into global portfolios and generate income from tracker funds.
“Saudi Arabia’s inclusion in global indices has fueled increased foreign investment interest,” said Sawsan Abdullatif, research associate at Bahrain-based asset manager SICO.
Nevertheless, domestic currency continues to provide the basis for high demand for IPOs.
As the series of listings has increased, investor behavior has evolved, but the large supply of deals has also brought greater scrutiny.
Institutional investors place greater emphasis on earnings visibility, management standards, and reliable growth strategies.
“The quality of deal flow varies from one offering to another and is closely linked to the visibility of earnings, the strength of management guidance, industry positioning, and clarity of disclosure in the prospectus,” noted Abdullatif.
The power of measurement has also begun to change.
Imad Chukrallah, founding partner and fund manager at Amwal Capital Partners, observes that the market has grown significantly as more companies prepare to list: “The IPO process is clear and the speed of listing is highly dependent on investor interest.”
“With valuations being squeezed and premiums in emerging markets disappearing significantly, new listings have had to be attractively priced,” Chukrallah said.
Foreign investors are also contributing to market penetration, he adds: “The biggest inflows into the market came from international investors, who remain underweight in Saudi Arabia compared to the benchmarks.”
District Leadership
Saudi Arabia is still the deepest equity market in terms of market capitalization, shares traded, and daily trading volumes, Chukrallah notes, and recent deals suggest that this pipeline is still active.
Last year, Saudi low-cost airline Flynas launched a major IPO related to the kingdom’s growing tourism sector.
Some Gulf markets, however, remain active. The UAE has hosted many high-profile listings in recent years and Oman’s listing of OQ Exploration & Production in 2024 showed that landmark deals could come from elsewhere in the region. Qatar has also seen some limited listing activity.
But the average Saudi market offers a clear advantage.
“The depth of the domestic institutional base, the breadth of sectors and the scale of the economy provide structural advantages,” noted Abdullatif.
Alongside the Big Market, Nomu has become an important conduit for small companies seeking access to public funding. The complementary market offers easier listing requirements than the main exchange, and although capital for debt repayment remains limited, Nomu serves as a stepping stone for companies that may succeed on the main board.
Navigating Geopolitical Uncertainty
“The country’s political landscape is uncertain,” admitted a Riyadh-based banker. “Any further deterioration could affect sentiment, release times, and potentially, the issue of wider diversity.”
So far, however, the Saudi market has shown resilience.
“Although recent developments increase uncertainty, the Saudi market has not been significantly affected,” Chukrallah said last month. “In fact, the market has been ready since the start of the war. The desire for successful companies with a unique value proposition remains strong.”
Saudi Arabia’s IPO market is increasingly defined not just by the speed of listings but by deep institutional participation, broad sector representation, and a growing pipeline of private equity issuers.
A combination of regulatory changes, increasing investor participation, and a strong listing pipeline suggest that it will not only remain the region’s busiest IPO market but also one of the most important financial institutions in the world.
