Egyptian tycoon Medhat Khalil's Raya targets October for IT unit IPO on EGX

Omokolade Ajayi -

Key Point

  • Raya Holding plans to list its IT unit, Raya Information Technology, on the Egyptian Exchange in October 2024.
  • EFG Hermes starts promoting Raya IT’s IPO abroad, aiming to offer 30 percent on the EGX in October.
  • Raya IT secures a credit line of up to EGP550 million ($17.6 million) from Al Baraka Bank to facilitate expansion plans.

Raya Holding for Financial Investments (Raya Holding), the Egyptian conglomerate led by tycoon Medhat Khalil, has set its sights on listing its information technology (IT) unit, Raya Information Technology (Raya IT), on the Egyptian Exchange (EGX) in October 2024.

The subsidiary’s planned listing is one of three — Raya IT, Raya for Trade and Distribution, and Aman Consumer Finance — that Raya Holding, under Medhat Khalil’s leadership, had previously placed on hold until market conditions improved.

Raya IT IPO in October, EFG Hermes starts promotion

The announcement, made by Hossam Hussein, Chief Financial Officer (CFO) of Raya Holding, follows headlines in March about Raya IT’s announcement in March of a planned strategic acquisition to diversify its business and bolster operational capabilities.

In his statement, Hussein disclosed the conglomerate’s intention to offer 30 percent of Raya IT on the EGX in October. He added that EFG Hermes, the IPO advisor, has already begun initial promotion abroad to gauge investor appetite for the offering.

Hussein also mentioned Raya Holding’s plans for securitization operations, but noted they are awaiting a decline in interest rates, currently at their highest levels due to monetary tightening to combat inflation.

Driving digital transformation and securing credit

To further drive digital transformation in Egypt and prepare for the IPO, Raya IT entered into a strategic agreement with Al Baraka Bank earlier this month.

The agreement grants Raya a credit line of up to EGP550 million ($17.6 million) to facilitate expansion plans. Al Baraka Bank aims to stimulate tech-based enterprises, create jobs, and contribute to Egypt’s economic growth through this financial support.

Raya Holding: Major player in Egypt’s investment scene

Established in 1999 through a merger, Raya Holding has become a significant player in Egypt’s investment scene under Medhat Khalil’s leadership. Khalil has reduced his holdings from a majority stake of 58.1 percent in December 2022 to 17.67 percent as of this report.

The group delivered a record financial performance in 2023, with revenue increasing by 53.31 percent to EGP 31.29 billion ($650 million), partly due to a rise in foreign currency-denominated revenues, which delivered 24 percent of Raya’s total revenue stream.

In 2023, Raya’s trade and distribution arm emerged as the primary revenue driver, contributing 44 percent. The IT sector followed closely at 22 percent, with Fintech and Non-Bank Financial Services (NBFS) contributing 15 percent.