United Carton Industries Co. (UCIC) saw its shares decline on debut following a $160 million initial public offering on the Saudi Stock Exchange, as broader market volatility weighed on the company's first trading session.
Shares closed 1.5% lower at 49.25 riyals on Tuesday, slipping from the IPO price of 50 riyals, despite briefly rising as much as 9% during the day. At one point, the stock dropped 2.8% below the offer price, reflecting a subdued investor response amid regional and global market flux.
The listing marked the first IPO in the Middle East since U.S. President Donald Trump’s announcement of sweeping tariffs on April 2. Despite the volatile backdrop, United Carton’s offering was heavily oversubscribed, attracting 20 billion riyals in orders.
Market Conditions and Valuation Concerns
UCIC raised 600 million riyals ($160 million) in the offering, pricing at the top end of the marketed range, with an initial market capitalization of approximately 2 billion riyals. Still, analysts pointed to valuation pressures and external headwinds.
“Valuations for the company were a bit stretched, which may have contributed to the share price performance,” said Chiro Ghosh, Vice President of Sell-Side Research at SICO Bank.
The underwhelming debut diverges from the trend seen in Saudi Arabia’s equity market, where newly listed companies often surge to the upper limits of daily price movement. Analysts suggest that regional investor caution is increasing due to the broader sell-off across Middle Eastern exchanges.
Broader Market Downturn
Saudi Arabia’s Tadawul All Share Index has declined more than 8% since late March, pressured by geopolitical uncertainty, declining oil prices, and international trade tensions. While the Gulf is perceived as relatively insulated from direct U.S. tariff impacts, investor sentiment has weakened across the region.
Despite the recent volatility, several IPOs in the Gulf — including listings by an airline, a healthcare group, and a real estate investment trust — have moved forward with their offerings, recording high levels of demand.
Market Leader in Packaging
According to its IPO prospectus, United Carton generated 671 million riyals in revenue during the first half of last year and holds an estimated 40% market share in Saudi Arabia’s corrugated carton segment. The company serves a range of industrial and consumer sectors and is considered one of the largest players in the kingdom’s packaging industry.
While its market fundamentals remain solid, analysts will be watching closely to see whether investor appetite stabilizes following the rocky debut.
