Saudi’s Cherry Trading IPO Opens for Retail (2 Days Only): 85.6x Institutional Demand Sets the Stage!
CHERRY 4265.SA | 25.14 | -1.64% |
Tadawul IPO Index TIPOC.SA | 4016.31 | -0.70% |
Tadawul All Shares Index TASI.SA | 11268.38 | -0.07% |
Cherry Trading Company, a leading vehicle leasing and rental operator in Saudi Arabia, has opened its retail subscription period today for its Initial Public Offering on the Tadawul Main Market.
Following the completion of the institutional book-building process, which saw overwhelming demand with 85.6x oversubscription, the company is now inviting individual investors to participate in this opportunity.
Key IPO Information:
- Retail Subscription Period: Wednesday, November 12, 2025 – Thursday, November 13, 2025 (2 days)
- Final Offer Price: SAR 28.00 per share (top of the range)
- Institutional Book-Building: Completed October 26-30, 2025 with 85.6x coverage
Offering Structure:
Following the successful institutional book-building phase, up to 20% of the total shares offered (maximum 1.8 million shares) will be allocated to individual retail subscribers. The remaining 80% (7.2 million shares) has been allocated to institutional investors during the book-building process.
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IPO Summary
| Category | Details |
|---|---|
| Company Name | Cherry Trading Co. |
| Market | Main Market (TASI) |
| Core Activities | Car Rentals |
| Capital | SAR 300 Million |
| Total Shares | 30 Million |
| Par Value | SAR 10 per share |
| Issue Percentage | 30% of the Company’s share capital |
| Number of Offered Shares | 9 Million |
| Qualified Subscribers | Participating institutions & Retail investors |
| Total Number of Shares Offered to Retail Investors | 1.8 Million shares (20% of the offering size) |
| Minimum Number of Offer Shares to be Applied for by Individual Investors | 10 shares |
| Maximum Number of Offer Shares to be Applied for by Individual Investors | 250,000 shares |
| Minimum Number of Offer Shares to be Applied for by Institutional Investors | 100,000 shares |
| Maximum Number of Offer Shares to be Applied for by Institutional Investors | 1.5 Million shares |
About Cherry Trading:
Cherry Trading Company is one of the leading players in Saudi Arabia's vehicle leasing industry, with over 40 years of operational experience. The company provides comprehensive leasing and rental solutions supported by advanced fleet management capabilities and a nationwide maintenance network.
The company’s fleet consists of 15,620 vehicles, of which 93.5% are allocated for long-term leasing contracts, while 6.5% are used for short-term (daily) rentals.
| Segment | Number of Vehicles | Share of Total |
| Long-term leasing | 14,597 | 93.5% |
| Short-term leasing | 1,023 | 6.5% |
| Total | 15,620 | 100% |
Market Position and Growth Trajectory
The company's market share in the Kingdom's long-term leasing segment has grown from 7.7% in 2023 to 8.8% in 2024. With operations across major cities including Riyadh, Jeddah, Al Khobar and Abha, Cherry has access to over 80% of the Kingdom's leasing market. As a registered vendor on platforms like Etimad, the company maintains direct access to government tenders, ensuring recurring revenue streams.
| Company | Market Share 2023 | Market Share 2024 |
| Budget Saudi | 29.7% | 31.3% |
| Lumi | 12.3% | 13.7% |
| Theeb | 11.2% | 12.5% |
| Cherry | 7.7% | 8.8% |
| Al Muftah | 7.5% | 7.7% |
| Others | 31.5% | 25.8% |
Financial Performance
Cherry's financial growth in 2024:
- Revenue Growth: Total revenue increased 5.3% to SAR 454.7 million in 2024, driven by an SAR 80.9 million increase in long-term lease revenue
- Margin Expansion: Gross margin improved significantly from 25.7% in 2023 to 32.0% in 2024, driven by improved fixed cost absorption and lower insurance costs
- Profitability: Net income margin increased from 13.2% in 2023 to 13.9% in 2024
- Return on Equity: ROE remained strong at 12.3% in 2024, reflecting consistent profitability and efficient capital use
Revenue Contribution by Segment (SAR mln)
| Segment | 2023 | % of Total Revenue | 2024 | % of Total Revenue | Change |
| Long-term leasing contracts | 243.4 | 56.4% | 324.3 | 71.3% | 33% |
| Short-term leasing contracts | 25.8 | 6.0% | 21.2 | 4.7% | (18%) |
| Vehicle sales | 162.7 | 37.7% | 109.1 | 24.0% | (33%) |
| Total | 431.8 | 100% | 454.7 | 100% | 5% |
Robust Revenue Backlog
As of December 31, 2024, the company maintained SAR 1.2 billion in long-term leasing backlog. This substantial backlog provides strong revenue visibility and is primarily supported by contracts with government and quasi-government customers, ensuring low credit risk and predictable cash flows.
Favorable Market Dynamics
The Saudi vehicle leasing and rental market is experiencing rapid growth driven by Saudi Vision 2030 initiatives. According to the company's market research report:
- Real GDP is forecasted to grow at a CAGR of 4.0% from 2025 to 2029
- The leasing market is projected to grow at a CAGR of 12.8% in fleet size and 13.5% in revenue between 2025 and 2029
- Inbound tourism is anticipated to grow at a CAGR of 7.5%, supporting strong demand for short-term car rentals
- The used car market is expected to increase by 8.8% in revenue between 2025 and 2029
Operational Excellence
Cherry's competitive advantage is built on comprehensive infrastructure: As of December 31, 2024, the company operates one central workshop, eight regional workshops and 13 mobile service centres, providing nationwide service coverage. The company utilizes telematics and real-time diagnostics to support predictive maintenance, reducing downtime and enhancing fleet reliability.
Information above is sourced and summarised from the company's Prospectus.
Investor Groups
The IPO consists of 9 million ordinary shares, representing 30% of the company's total share capital post-offering. The offering is divided into two tranches targeting distinct investor groups:
Tranche A: Participating Parties (Institutional Investors)
This tranche is designated for institutional investors eligible to participate in the book-building process as defined by CMA regulations. Qualifying participants include investment funds, Qualified Foreign Investors, GCC Corporate Investors, and certain other foreign investors under SWAP Agreements.
Initially, all 9 million Offer Shares (100% of the offering) are provisionally allocated to Participating Parties. The final allocation will be determined after the offering period concludes, with the Financial Advisors coordinating with the company using a discretionary allocation mechanism. This means some participating entities may receive no allocation.
However, the Financial Advisors retain the right to reduce the institutional allocation to 7.2 million shares (80% of the offering) if sufficient demand exists from individual subscribers.
Tranche B: Individual Subscribers
This tranche serves Saudi Arabian natural persons, including Saudi female divorcees or widows with minor children from non-Saudi marriages (who may subscribe for themselves or their minor children upon providing proper documentation). The tranche also includes non-Saudi natural persons residing in the Kingdom and GCC natural persons.
Up to 1.8 million Offer Shares (20% of the total offering) may be allocated to Individual Subscribers. Important restrictions apply: subscriptions made by individuals in the name of their divorced wives are invalid and subject to legal sanctions, and duplicate subscriptions will be rejected with only the first subscription accepted.
If Individual Subscribers do not fully subscribe to their allocated shares, the Financial Advisors may reduce this tranche proportionally based on actual subscription levels.
Direct Substantial Shareholders and Ownership Percentages held thereby Pre- and Post-Offering
| Shareholder | Shareholding (Pre-Offering) | Shareholding (Post-Offering) | ||||
|---|---|---|---|---|---|---|
| No. of Shares | Ownership (%) (1) | Overall Nominal Value (SAR) | No. of Shares | Ownership (%) (1) | Overall Nominal Value (SAR) | |
| Saudi Edarah Holding Company | 29,550,000 | 98.50% | 295,500,000 | 20,685,000 | 68.95% | 206,850,000 |
| Total | 29,550,000 | 98.50% | 295,500,000 | 20,685,000 | 68.95% | 206,850,000 |
Source: The Company.
(1) The ownership percentages have been rounded to the nearest two decimal place.
Expected Offering Timetable
| Event | Date |
|---|---|
| Book-building and participating parties subscription registration period | A period of five (5) days commencing on Sunday, 4 Jumada al-Ula 1447H (corresponding to 26 October 2025G), until the end of Thursday, 8 Jumada al-Ula 1447H (corresponding to 30 October 2025G). |
| Deadline for submitting subscription application forms by participating entities based on the number of shares initially allocated to each | Thursday, 15 Jumada al-Ula 1447H (corresponding to 6 November 2025G). |
| Deadline for payment of subscription amounts by participating entities based on the number of shares initially allocated to each | Monday, 19 Jumada al-Ula 1447H (corresponding to 10 November 2025G). |
| Individual investors subscription period | A period of two (2) days commencing on Wednesday, 21 Jumada al-Ula 1447H (corresponding to 12 November 2025G) until the end of Thursday, 22 Jumada al-Ula 1447H (corresponding to 13 November 2025G). |
| Deadline for submitting subscription applications and payment of subscription amounts by individual subscribers | Thursday, 22 Jumada al-Ula 1447H (corresponding to 13 November 2025G). |
| Announcement of final allocation of bid shares | No later than Wednesday, 28 Jumada al-Ula 1447H (corresponding to 19 November 2025G). |
| Refund of excess subscription amounts (if any) | No later than Thursday, 29 Jumada al-Ula 1447H (corresponding to 20 November 2025G). |
| Expected date for commencement of trading of shares on the market | Trading of the Company's Shares on the Exchange is expected to commence after the completion of all of the relevant legal requirements and procedures. The trading commencement date of the Shares will be announced in local newspapers and Tadawul's website (www.saudiexchange.sa). |
Note: The above timetable and dates therein are indicative and subject to change. Actual dates will be communicated on the websites of Tadawul (www.saudiexchange.sa), the Financial Advisors ((www.bsfcapital.sa) and (www.efghermesksa.com)) and the Company (www.cherry.com.sa).
Introducing the new IPO feature on Sahm platform: A step-by-step guide to subscribing to the IPO
Click here to read the full Prospectus
Further updates regarding this IPO will be provided as more information becomes available.