NourNet Names Goldman, HSBC as Advisors for Potential Saudi IPO

Goldman Sachs and HSBC have been chosen by Saudi digital services firm NourNet to guide a possible initial public offering, according to individuals with knowledge of the situation, adding to a growing queue of Gulf deals even amid regional conflicts. The share sale on the Riyadh exchange might be executed as early as this year, the individuals stated, requesting anonymity as the information is not public. No definitive choices have been reached, and specifics such as the offering's magnitude and schedule are still being negotiated.

Alternative asset manager Investcorp Holdings, which took a controlling interest in NourNet in 2022, had earlier been collaborating with HSBC on a possible transaction, as Bloomberg News reported previously.

Representatives for Goldman, HSBC, Investcorp, and NourNet all declined to provide remarks.

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This potential IPO emerges at a time when Gulf listing activity has hit its weakest opening in five years, prolonging a slump that started before the Iran conflict. Nevertheless, bankers indicate that firms are getting ready to list as market conditions turn favorable, with a robust pipeline of deals spanning Saudi Arabia, the UAE, Kuwait, and Qatar.

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The kingdom currently holds the strongest pipeline in the region. Despite a major Saudi contractor postponing its IPO in June due to the conflict, the pipeline remains robust.

For further details: Billionaire Olayans and technology companies are aiming to revive Saudi IPO activity.

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Firms that listed this year have mostly seen strong returns. Shares of an Omani fertilizer company have risen about a quarter since its $678 million IPO this month, supported by the nation's limited exposure to the conflict and shipping lanes that avoid the Strait of Hormuz. Kuwait's Trolley General Trading Co. has gained roughly half its value since listing in March, and e-commerce company Boutiqaat is exploring a potential IPO with Goldman Sachs that might happen by year-end.

Further reading: Goldman reportedly advising on a retailer IPO, strengthening its Kuwait presence.

The Saudi main equity index is up around 3% in 2024, beating most Gulf benchmarks apart from Oman.

Established in 1998, NourNet provides cloud, cybersecurity, data center oversight, and other technology solutions to over 1,500 customers, according to its site. An IPO from NourNet would also add technology exposure to the Saudi exchange, where investors have frequently noted a shortage of firms tied to the sectors driving global stock gains this year.

Given the strong demand for tech-focused listings, NourNet's potential debut could help diversify the Saudi exchange beyond its traditional energy and financial heavyweights, providing local investors with a rare pure-play opportunity in digital services. The firm's established client base and backing from Investcorp add credibility to the offering, which may attract both institutional and retail interest when finalized.

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