What Drives the Cost of an IPO on Tadawul or Nomu?

The cost lines behind a listing on the Saudi Exchange, from financial advisers and underwriting to audit, legal work and ongoing obligations, and how companies control them.

The cost of listing on the Saudi Exchange is driven mainly by advisory and underwriting work, preparation of the company, and the ongoing cost of being listed, rather than by exchange fees alone. Fees charged by the CMA and the exchange are published and revised, so confirm them at the time. The breakdown below explains the main cost drivers and how to keep them in proportion to the benefit.

What this number does and does not include

This covers the cost of preparing and completing a listing on the Main Market or Nomu and the first years of listed company obligations. It excludes the value dilution from issuing new shares, the discount at which shares may be priced, and the management time spent on the process, all of which are real costs but harder to quantify. Specific fees must be confirmed with the CMA, the exchange and advisers.

Financial adviser

A CMA-licensed financial adviser manages the process, prepares the application and coordinates the other parties.

• Pushes it up: complex group structures, a large offering and a long preparation period.
• Brings it down: a well-prepared company with clean structure and records.
• How to control it: agree a fee structure with clear milestones and a defined scope.

Underwriting and distribution

Underwriters and bookrunners commit to or market the offering to investors, usually for a fee linked to the offering size.

• Pushes it up: large offerings, weak market conditions and a need for wide distribution.
• Brings it down: strong investor demand and a clear equity story; some Nomu listings involve limited or no offering.
• How to control it: negotiate fee rates and incentive structures with several banks.

Legal advisers

Legal due diligence, restructuring, prospectus drafting and regulatory submissions.

• Pushes it up: unresolved legal issues, many subsidiaries and related-party dealings.
• Brings it down: a legal clean-up completed before the process starts.
• How to control it: conduct a pre-IPO legal review early to avoid costly fixes during the process.

Audit and financial reporting

Audited financial statements for the required period and any reviews or restatements needed to meet listing requirements.

• Pushes it up: weak historical accounts, changes of auditor or complex consolidations.
• Brings it down: consistent, high-quality audited accounts over several years.
• How to control it: upgrade financial reporting well before the planned listing.

Governance and restructuring

Changes to board composition, committees, policies, internal controls and legal structure to meet listing and corporate governance rules.

• Pushes it up: a family business with informal governance and many intertwined companies.
• Brings it down: an existing independent board and documented policies.
• How to control it: start governance upgrades one to two years ahead.

Regulatory and exchange fees

Application, registration and listing fees charged by the CMA and the Saudi Exchange.

• Pushes it up: larger offerings and market capitalisation where fees scale.
• Brings it down: smaller listings, with Nomu typically lighter.
• How to control it: confirm current published fees at the start and budget for annual listing fees.

Marketing and investor relations

Roadshows, investor presentations, translation, printing and the investor relations function after listing.

• Pushes it up: wide international marketing and an extensive roadshow.
• Brings it down: a focused investor base and digital materials.
• How to control it: match the marketing effort to the target investor base.

Ongoing listed company obligations

Periodic disclosure, quarterly and annual reports, general assemblies, board committees, compliance officers and audit fees.

• Pushes it up: weak internal systems that require manual reporting.
• Brings it down: systems built to produce reliable reports routinely.
• How to control it: budget these costs as permanent overhead, not one-off listing costs.

Costs that never appear on the first page

• Management time diverted from running the business for a year or more.
• Price discount at listing needed to attract investors.
• Costs of a postponed or withdrawn listing if market conditions change.
• Tax effects of restructuring the group before listing.
• Higher directors and officers insurance for a listed company.
• Remuneration of independent directors and committee members.

Keeping the budget honest

Compare the total cost of listing, including ongoing obligations for several years, with the benefit you expect: capital raised, liquidity for shareholders, valuation and profile. If a trade sale or private placement would achieve most of the same benefits at lower cost, listing may not be justified yet. Nomu can be a lower-cost first step for smaller companies.

• Confirm current CMA and exchange fees and listing requirements with your financial adviser.
• Review the cost of preparation against the timetable at each stage.
• Reassess market conditions before committing to underwriting.
• Budget the ongoing costs of being listed for at least three years.
• Compare with the alternative of a trade sale or private placement.

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