The sequence in brief
- Early-look and pilot fishing meetings with a small number of investors, months before launch.
- Publication of research by analysts of the syndicate banks, followed by investor education.
- Intention to float (ITF) announcement, which makes the deal public.
- Setting the price range and publishing the prospectus.
- Roadshow and bookbuilding, often 7-10 trading days according to market practice summaries.
- Pricing, allocation and announcement of the final offer size.
Not every market follows this exact order, and in the Gulf the ITF and subscription period are tied to local rules on public offers. The logic is the same everywhere: reduce uncertainty step by step, so that by the time the book opens, the banks already know roughly who will buy and at what valuation.
Pre-marketing and analyst research
Early-look meetings let management meet a handful of long-term investors without a live deal. Pilot fishing is closer to launch and tests specific valuation ideas. The feedback shapes the equity story and sometimes the decision whether to launch at all.
Analysts of the syndicate banks publish pre-deal research based on management presentations and public information. The research is prepared under internal separation rules and is independent of the bank's deal team. During investor education, these analysts present their models to institutional investors and collect views on value. This is the first real test of the valuation range. Once the prospectus is published, research is subject to blackout rules, so everything an investor relies on must be in the prospectus.
Price range and order book
The price range is set after investor education, usually together with the publication of the prospectus. A narrow range signals confidence; a wide one leaves room to adjust. During bookbuilding the banks record each order with its size, price limit and investor type. The book is not only about volume. Banks look at quality: how many orders come from long-only funds that hold for years, how many from hedge funds that may sell on the first day, how price-sensitive the demand is, and how concentrated the book is.
In Hong Kong, following changes on 4 August 2025, at least 40% of the offer must go to the bookbuilding tranche, which shifts allocation towards institutional demand. In the US, the book is built by the underwriters under SEC rules for registered offerings on Nasdaq or NYSE.
Tranches in the Gulf
Gulf IPOs are typically split into tranches. The institutional tranche, often marketed internationally under Regulation S, is built through bookbuilding. The retail tranche is a subscription by individual investors, usually through receiving banks and online portals, such as the IPO portals of UAE banks. Some offerings add a dedicated tranche for employees or for specific categories of local investors. The split between tranches is fixed in the prospectus, often with a mechanism to reallocate shares between them if demand is uneven.
Retail demand in the UAE and Saudi Arabia has historically been strong, which is one reason these markets are attractive to issuers. In Saudi Arabia, the parallel market Nomu remains limited to qualified investors, so a Nomu offering has no general retail tranche. Malaysia introduced a minimum public balloting allocation for ACE Market offerings from June 2026. A recent onshore UAE reference: DIP Holding offered 20% of its shares at Dh1.12 per share and raised USD 529 million, the first UAE IPO of 2026, according to The National.
| Tranche | Who | How demand is collected |
|---|---|---|
| Institutional | Funds, insurers, sovereign and family offices, international investors | Bookbuilding through syndicate banks |
| Retail | Individual investors in the home market | Subscription through receiving banks and portals |
| Cornerstone or anchor | Large investors committing before launch | Signed agreements disclosed in the prospectus |
| Employees or special categories | As defined in the prospectus | Separate subscription where provided |
Cornerstone and anchor investors
Cornerstone investors commit to buy a fixed amount of shares at the offer price before the book opens, typically 1-3 months before the IPO. They are common in the Gulf and in Hong Kong. Their names and commitments are disclosed in the prospectus, and they usually accept a lock-up. For the market, a strong cornerstone group reduces execution risk and signals valuation support. For the issuer, the price is less flexible: the more of the deal is pre-committed, the less of it is truly price-discovered.
Pricing and allocation
At the close of the book, the issuer, selling shareholders and global coordinators agree the final price. The aim is not the maximum price the book can bear, but a price that leaves room for stable trading after listing. Allocation is then made at the discretion of the banks in consultation with the issuer for the institutional tranche, favouring investors who are expected to hold, and according to the rules in the prospectus for the retail tranche. Where retail demand exceeds the tranche, allocations are scaled back, often with a minimum allocation per investor. Final results, including the price, size and any reallocation between tranches, are announced before listing day.