The parallel market received “Nomu” in Saudi Arabia, recently. Listing and trading the shares of “Jahez” International for Information Systems TechnologyAfter offering an 18% stake in its capital at a price of 850 riyals per share, “Ready” share became the most expensive in the Saudi market.
In an interview with Al-Arabiya, Faris Al-Ghannam, Executive Vice President of HSBC Saudi Arabia – which played the role of price stability manager for the “ready” offering – explained this high pricing as the company is emerging in nature and the size of its capital is still in the process of growth, so The value of the company was divided into a smaller number of shares, indicating that a high share price does not necessarily mean a high valuation, because the share price reflects the value of the company divided by the number of shares.
He stressed that the “ready” offering focused on small investors by allocating 20% of the offering to qualified individuals.
Al-Ghannam said that the launch of “Jahez” is an important step, as it is the first emerging e-commerce company to be launched in the Saudi market, which opens the market, specifically “Nomu”, to be a platform for financing and listing more startups in the Kingdom and investing in this type of company.
He continued, “The offering of emerging companies, especially those working in e-commerce, is different in nature. Evaluation is a challenge in this case, as how to evaluate a company that is still at an early stage and its accounting information does not reflect the opportunity inherent in it.”
He added: “We have set up a team specialized in leading offerings in the Kingdom, and it is one of the largest teams in the market, along with a team specialized in the technology sector and emerging companies. To reach the evaluation, we took two main steps: first, an in-depth study of the company to know its activity, and secondly: preparing or structuring the offering method. Communicate with investors early to ensure that they understand the way to evaluate this type of company.”
The Executive Vice President of HSBC Saudi Arabia indicated that when companies such as Facebook and Amazon were initially introduced, their sales and returns were almost non-existent.
He continued, “The ‘ready’ business model is still in constant development, and we have studied and analyzed the volume index or the total goods value index, which includes the basket of goods the company provides to customers and platform commission. The total value of goods is the main indicator that is used to measure the value of companies such as Deliveroo and Dordash. Even eBay and Amazon are in earlier stages.”
