Shares in Saudi Arabia’s MBC Group, one of the Middle East’s biggest media companies, soared 30% on their market debut Monday.
The stock traded at 32.5 riyals ($8.67) apiece on the kingdom’s Tadawul stock exchange, up from their listing price of 25 riyals ($6.67) and valuing the TV broadcasting and streaming company at almost 11 billion riyals ($2.9 billion).
The initial public offering, which HSBC and JPMorgan Chase helped to manage, is part of a privatization drive by the Saudi government to support its Vision 2030 strategy of diversifying the economy, attracting new investment and gradually weaning itself off its vast oil revenues.
The number of companies deciding to list in Saudi Arabia has risen seven-fold since 2019, according to data provider Dealogic.
The government retains a majority 54% stake in MBC through Istedamah Holding Company, while MBC Group chairman Waleed bin Ibrahim Al Ibrahim owns a 36% stake, down from 60% and 40%, respectively, before the IPO.
According to its website, MBC — which calls itself the “leading media company in the Middle East and North Africa” — runs 13 free-to-air TV channels, three radio stations and the popular Arabic streaming platform Shahid, which collectively rake in 150 million viewers each week.
The company plans to grow Shahid’s subscriber numbers, increase advertising sales across its platforms, and expand its reach into sports, music, gaming and events, Sam Barnett, CEO of MBC Group, said in a statement Monday.
It also has its sights set further afield.
“While our heart remains entrenched in Arab culture, (the IPO) is in line with our ambitions to continue evolving as a global media and entertainment powerhouse,” Al Ibrahim said in November when he announced the plan to go public.
The Saudi government took a controlling stake in MBC in 2018 following an anti-corruption crackdown on private companies and royal family members, according to Reuters.
Al Ibrahim was among the 200 or so business executives, government leaders and princes detained by officials at the Ritz-Carlton hotel in Riyadh.
MBC, which makes most of its money from advertizing, has seen a sharp drop in revenues from its traditional broadcasting business over the last few years while its streaming business has flourished.
The company made 76% of its revenue from broadcasting in 2020 but that share had fallen to 58% in 2022. Meanwhile, the number of Shahid subscribers grew from just 100,000 in December 2019 to 3.76 million by April 2023.
MBC said it believes “Shahid can be grown substantially in the coming years” owing to a large, young regional population with rising disposable incomes, as well as markets outside of the Middle East and North Africa with “a significant Arab diaspora and large Arabic-speaking populations.”
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