ZAWYA: GCC equity capital markets are expected to recover as IPOs, follow-ons and accelerated bookbuilds (ABBs) pick up in the coming months. However, it is defensive, low-beta issuers that are likely to emerge as winners, with investors displaying a clear preference for them while the US–Iran conflict continues.

“During [periods of] turmoil, investors naturally align towards defensive, lower-beta sectors that offer resilient earnings and greater visibility on cash flows. We've seen this reflected across the GCC, where sectors such as fertilizers, essential industrials,” said Rawad Kassouf, Head of ECM Execution & Syndicate at Arqaam.

Dividends and defensive sectors take the lead

Notable IPOs in the GCC have been delayed until after the summer amid weak market sentiment, including Saudi Arabia’s Arabian Dyar and Mutlaq Al Ghowairi and the UAE’s Dubai Investment Park (DIP), the country’s largest fully integrated mixed‑use development. In the ECM space, focus on growth may also be falling out of favour, while government-backed IPOs could attract stronger investor demand.
“Investors will like DIP’s IPO if it comes to market as it combines a dividend-paying profile with a growth element, but it will remain subject to valuation. The bulk of the story is that it is defensive. By contrast, growth stories are a little more complicated now, as many corporates, given the current geopolitical situation, may not be in a position to provide clear guidance or forecasts,” Kassouf said.
“Investors favour companies that offer a combination of predictable cash flows, resilient earnings and visible growth,” he added.

Companies with global pricing exposure and the ability to export are particularly well positioned, as they are less dependent on domestic demand and can benefit from resilient international markets.

For example, Oman India Fertiliser Co. (OMIFCO) surged by over 23% on its trading debut after raising $678 million in the GCC’s largest IPO of the year. Arqaam Capital, which was a joint book runner in the OMIFCO IPO, also recently advised on a $80-million private placement for Saudi East Pipes Integrated Co.

According to data from the London Stock Exchange Group (LSEG), equity and equity-related issuances totalled just $2.1 billion during the first six months of 2026, marking the weakest first-half performance since 2020. By sector, materials led fundraising activity, accounting for $816.2 million, or 39% of total equity capital raised across the region during the first half. Besides OMIFCO, the notable deals included Kuwait-based Trolley General Trading Co’s $194.4 million IPO and a $92.47 million follow-on from Oman’s OQ Base Industries. 

GREs hold IPO advantage

Government-related entities (GREs) have consistently been among the most successful IPO candidates across the GCC. For example, Umm Al Qura for Development & Construction, one of Saudi Arabia’s largest and most successful GRE-backed IPOs, raised $523 million in 2025, and in the UAE, ADNOC Gas shares are now trading around AED 3.37, about 42% above their March 2023 IPO price of AED 2.37.

GREs typically possess many of the attributes institutional investors value most in the current environment; they are often market leaders in strategic sectors, with established operating histories and resilient business models.

According to Kassouf, most GRE companies that decide to come to market can be confident about their success. “They also tend to be of sufficient scale to support meaningful institutional participation and secondary market liquidity, both of which are key considerations for global investors, who [may] take comfort in the strategic importance of these assets within the broader economic agenda of the region,” he said. When it comes to offerings mainly focused on growth plans, there is an increased scrutiny on business plans and forward-looking guidance given the current geopolitical situation surrounding the region.

A new valuation regime

With risk premiums soaring due to the regional conflicts, valuation expectations today are more measured than they were six months ago. “But that does not prevent successful execution. It simply requires issuers and investors to find the right equilibrium,” Kassouf said.

Liquidity remains strong across the GCC, but investors have become considerably more selective in how they deploy it.

“I have also seen a shift away from the mentality that every IPO is a ‘must-own’ opportunity,” he added. “Investors are increasingly prepared to walk away from transactions that they believe are fully valued. The market remains open, but it has become more discerning.”