Latest news with #NishitLakhotia
Skift
18-06-2025
- Business
- Skift
Saudi Low-Cost Carrier Flynas Launches IPO, But Israel-Iran Conflict Weighs on Market
Flynas is the first Middle Eastern airline to go public in nearly two decades — but its timing is far from ideal. Renewed regional tensions just days before the debut have caused regional airline stocks to slip. Flynas, Saudi Arabia's budget carrier, made its IPO debut Wednesday, but growing tensions between Israel and Iran weighed on regional markets and local airline stocks. Flynas had priced its offering at 80 riyals ($21.38) a share, giving the low-cost airline a valuation of 13.7 billion riyals ($3.7 billion). The shares initially dropped as much as 13% Wednesday and trading was briefly halted twice within the first 20 minutes of the session. By midday, shares were down but had recovered much of the loss. "Given how the situation changed this week with escalating geopolitical crisis and closure of air space and regional flight disruption, it may have been prudent to delay the listing until things settled," wrote Nishit Lakhotia, head of research at Bahrain's Sico Bank, on LinkedIn. The UAE's Air Arabia is down more than 3% this week, while Kuwait's Jazeera Airways tumbled as much as 4.2% on Wednesday, following its worst drop since 2020 earlier in the week. Despite the dip, the Flynas IPO was the largest in the Middle East so far this year and marked the first Gulf airline to go public in nearly two decades after Air Arabia in 2007. The IPO and Flynas Expansion The total size of the IPO is $1.1 billion, the company said when it announced the IPO price, and proceeds will be used to support fleet expansion, extend its network, and fund general corporate activities. In February, Flynas announced it would be receiving more than 100 Airbus aircraft over the next five years, with the expected growth of its fleet to more than 160 aircraft by the end of 2030. It has orders for 280 aircraft worth over 161 billion Riyals ($42.9 billion). In May, Flynas CEO Bander Al-Muhanna said the IPO would be "a strategic step that will accelerate the execution of our growth ambitions and solidify our position as the leading low-cost carrier for short- and medium-haul flights across the Middle East and North Africa by 2030." Flynas connects more than 70 domestic and international destinations with more than 1,500 weekly flights. For the first nine months of last year, it served 10.9 million passengers, according to its IPO prospectus. The airline aims to reach 165 domestic and international destinations, in line with the country's Vision 2030. Saudi Arabia will soon have four major airlines: Saudia, Flynas, Flyadeal, and Riyadh Air. Saudia and Riyadh Air are long-haul national carriers, while Flynas and Flyadeal are budget, short- and medium-haul. Riyadh Air hasn't launched yet, but its first flight is expected by the end of the year and it targets 100 million passengers by 2030. Saudia had 20 million passengers last year and Flyadeal had 7.9 million. Currently, the Saudia routes between Riyadh and Dubai are especially popular as business people move between the two cities. During the Skift Travel Podcast, Almosafer CEO Muzzammil Ahussain said: 'Given the demand, Riyadh to Dubai is one of the most expensive and profitable routes in the world. Especially the business class, given the amount of trade between the two countries. The business travel going on… It's sometimes $4,000-$5,000 for a one-hour business class flight.' He added: 'Investments in new airports, new airlines, [demand] is only going to increase.' Ahussain said he's hoping for an Almosafer IPO in the next 12 to 18 months. What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies. The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance. Read the full methodology behind the Skift Travel 200.
Zawya
18-06-2025
- Business
- Zawya
Israel–Iran conflict could impact GCC IPO pipeline and valuations, warn analysts
The escalating tensions between Israel and Iran will likely hit business confidence in the GCC region, according to the latest geopolitical risk report by S&P Global Ratings, while analysts have warned of a trickle-down effect that could impact the region's IPO pipeline and put valuations at risk. While no IPO has been delayed since the conflict escalated last week, analysts are braced for choppy markets. Nishit Lakhotia, Group Head of Research at Bahrain's Sico Bank, told Zawya that 'it makes prudent sense to not list in a hurry if the macro environment is not conducive and TASI [Tadawul All-Shares Index] itself is trading at June 2021 levels.' Lakhotia's comment comes in wake of the Saudi Exchange closing on Sunday at its lowest level in 20 months, at 10,731.59. It opened almost 4% lower, at 10,429.67, before recovering most of its losses. George Pavel, General Manager at trading platform added that the uncertainty markets have faced in 2025, triggered by April's US tariff turmoil, coupled with recession fears, could result in a deferred IPO pipeline in the region. 'The direct Iran–Israel conflict has acted as an acute shock on top of this fragile environment. Its immediate effect was to trigger sharp market sell-offs and extreme volatility. This instability is making new IPOs more challenging as investor confidence declines,' he stated. All eyes are currently on two major listings coming out of Saudi Arabia: Specialized Medical Company, which closed its retail offering for 15 million shares on the Main Market at 25 Saudi riyals ($6.66) per share on Monday, and budget carrier flynas, which will start trading on Tadawul from June 18. Kate Leaman, Chief Market Analyst at AvaTrade, said the current escalation has introduced fresh uncertainty into the region's IPO plans and that the tone has shifted. 'For large, state-backed deals in particular, this conflict is forcing a rethink,' she said. 'Some issuers may delay. Not indefinitely, but enough to wait for volatility to ease. Deals planned for Q3 may slip into Q4, and a few could even push into 2026, depending on how this unfolds.' According to Leaman, it's not a total freeze, as several smaller IPOs, 'especially those focused on local markets, are moving forward' as they are less exposed to global capital flows and investor sentiment tied to geopolitics. 'In essence, the IPO window isn't shut; it's just narrowed. Big-ticket deals may hold off for stability. But domestic, sector-resilient names could still see strong demand. Unless the conflict escalates further, expect IPO activity to continue in a more cautious, targeted fashion,' she said. Investor sentiment Valuations have also come under scrutiny, with Lokhatia noting this will play a 'central role' in determining the success of the IPOs hitting the market in the coming weeks. Pavel cautioned as well that investors could also use their position to negotiate pricing. 'The conflict forces an immediate and rational repricing of risk, making investors more price-conscious. Investors could demand a significant 'geopolitical discount' to compensate for the new risks of wider tensions. This means issuers must accept lower valuations to attract capital. Speculative, high-growth companies, particularly in tech, could find private market valuations intensely scrutinised and likely unattainable in the current market.' Vijay Valecha, CIO at Century Financial, had a different take, drawing parallels with US President Donald Trump's 'back-and-forth trade policies threatening global supply chains', which sparked expectations of an inflationary environment and caused analysts to expect valuations of IPOs to be affected. 'Despite that, Dubai's Holdings' REIT was priced at the top end of the range and listed at a market valuation of 14.3 billion UAE dirhams ($3.9 billion), firmly positioning it as the largest listed REIT in the GCC,' he said. According to Valecha, GCC markets have become habituated to geopolitical escalations, 'with market participants seeing them as short-term interruptions to rallies and using the dips to enter the market.' (Reporting by Bindu Rai, editing by Seban Scaria)
