Retail subscription to solutions by stc starts today

Logo of Arabian Internet and Communications Services Co. (solutions by stc)

Retail investors start, today, Sept. 19, subscription to 2.4 million shares of Arabian Internet and Communications Services Co. (solutions by stc), at SAR 151 a share.

On June 28, the Capital Market Authority (CMA) approved the company's request to offer a 20% stake, or 24 million shares, in an initial public offering (IPO). It allocated 90% of the total offered shares to institutional investors, while the remaining 10% was allocated to retail subscribers.

Retail subscription will last three days, ending Tuesday, Sept. 21.

This is the fourth IPO on the Saudi Exchange (Tadawul) in 2021, following Alkhorayef Water & Power Technologies Co., Theeb Rent a Car Co. and Tanmiah Food Co.

The Saudi market saw three IPOs in 2020, namely Dr. Sulaiman Al Habib Medical Services Group in February, Amlak International for Real Estate Finance Co. in July, and BinDawood Holding in October.

Company Info

solutions by stc started its business more than 25 years ago. It provides integrated services and solutions in information technology (IT) and digital services in the Kingdom.

Currently, the company, which offers services in 35 Saudi cities, has more than 24,000 clients.

solutions by stc has a system of global alliances and partnerships covering the information and communications technology (ICT) sector, with more than 150 partners around the world in the fields of IT and digital services.

Below table details the services provided by the company:

The company's five-year strategy includes the following:

Securing a leading position in the field of managed and professional services: Demand in the IT sector is directed towards cloud computing services instead of establishing data systems centers.

Expanding the product portfolio: This is achieved through boosting focus on the existing and future products in new sectors, as well as developing digital and communication service packages, while focusing on small and medium-sized enterprises (SMEs).

Enhancing the breakthroughs achieved at the level of clients and alliances with global partners: Through paying attention to customer experience, governance, and service delivery.

Promoting efficiency and collaboration: Through building technical capacities, as well as managing resources and spending efficiency.

Market Share

The company owns a 13% market share in the Saudi IT services industry, which is deemed a fragmented market (except for connectivity, standalone software, and hardware) – more than double the size of the second largest IT services provider by market share.

Fragmented specialized players hold a market share of 48% in the IT sector, hitting SAR 19.8 billion in 2018.

The company’s business is currently concentrated in the Saudi market. The percentage of sales outside the Kingdom (in Kuwait and Bahrain) does not exceed 0.15% of the company’s total sales for the financial year ended Dec. 31, 2020. solutions by stc has five branches in Saudi Arabia.

According to the prospectus, solutions by stc plans to participate in growth solutions to target industry verticals and use cases with high potential (for example, financial services due to regulatory trend towards bringing data storage in-house).

The company aims to increase its market share in the Kingdom and achieve sustainable revenue growth while focusing on improving profitability to maximize shareholders’ returns.

solutions by stc holds the largest market share of 23% in the cybersecurity segment, followed by managed networks (17%), data center and cloud computing as well as office equipment (16% each).

The following table shows the company’s market share in various segments:

*The company and the market consultant derived this data from the market data related to the International Data Corp. (IDC) since 2018.

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