Saudi Arabia’s Mutlaq Al-Ghowairi Contracting Company (MGC) has decided to cancel its planned initial public offering (IPO) in Riyadh despite receiving strong investor interest, according to an adviser involved in the transaction. The proposed offering, which could have raised up to $800 million, was expected to be one of the region’s first significant equity market debuts since the outbreak of the conflict in Iran.

The company’s shares had been oversubscribed multiple times at the top end of the price range of 12.5 riyals ($3.33) per share during pricing last week. However, following consultations with its advisers, MGC chose to withdraw the IPO, according to a filing with the Saudi stock exchange submitted by joint financial adviser Al Rajhi Capital.

MGC reaffirmed its commitment to ongoing expansion and strategic initiatives, indicating that it will continue to explore alternative growth avenues and may revisit the decision to go public at a later date.

Established in 1977, the Riyadh-based company focuses on large-scale projects in water infrastructure, transportation, and selective urban development. As of March 31, MGC reported a backlog valued at 10.6 billion riyals ($2.82 billion), reflecting a robust pipeline of projects.

The IPO was poised to be among the largest in the Middle East this year and involved the sale of 240 million existing ordinary shares, representing 30% of the company’s equity. Al Rajhi Capital and Morgan Stanley were appointed as joint financial advisers on the deal.

The decision to postpone the listing comes amid a significant slowdown in equity capital markets across the Middle East and North Africa. Regional issuance of equity and equity-related instruments reached just $427.9 million in the first quarter, marking a 91% decline compared with the same period last year and representing the slowest start to the year since 2011. This downturn follows a surge in market activity driven by economic diversification efforts in the aftermath of the COVID-19 pandemic.

The muted market conditions and ongoing geopolitical uncertainties are believed to have influenced MGC’s decision to shelve the offering, despite initial investor appetite. The company’s future capital-raising plans remain under review.