How IPOs Work on the EGX
From book-building to listing — how Egyptian IPOs are structured and allocated
Two Common Structures
Most Egyptian IPOs use a combined structure: an institutional book-building tranche and a retail public offering tranche. The institutional tranche (typically the larger portion) is priced through demand discovery; the retail tranche is then offered at the same price (or at a fixed discount) to individual subscribers.
This structure allows price discovery from sophisticated investors while still giving retail investors access to the issue.
How Retail Subscribers Apply
Retail investors apply through licensed brokers or, increasingly, through participating banks. You submit the number of shares you wish to buy at the offer price, with funds blocked in your account during the subscription period.
If the retail tranche is oversubscribed (which is common for high-profile IPOs), allocations are scaled down pro-rata — meaning you receive a proportional fraction of what you applied for, with the unused cash refunded to your account.
Lockups and Stabilisation
Many EGX IPOs include lockup periods restricting selling shareholders, founders, and employees from disposing of shares for a defined period (often 6–12 months) post-listing. Some issues also include a stabilisation mechanism allowing the lead manager to support the price during the early aftermarket.
Lockup expiries are watched carefully — they can introduce supply pressure that weighs on the share price even when fundamentals are unchanged.
Should You Subscribe to Every IPO?
No. IPOs are sold, not bought — meaning the seller chooses the timing and price. The discipline is identical to any other stock decision: estimate intrinsic value, demand a margin of safety, and pass when the offer price exceeds what the business is worth.
Several high-profile EGX IPOs have traded well below their offer price for extended periods after listing. Discipline beats enthusiasm.
FAQ
Can foreigners subscribe to Egyptian IPOs?
Yes, in most cases. Foreign retail and institutional investors can participate through licensed Egyptian brokers, subject to the specific terms of each issue. Government privatisation IPOs sometimes have separate tranches for Egyptian and foreign investors.
How is the IPO price decided?
Through institutional book-building. The lead manager collects bids from qualified investors over several days and, based on demand and price sensitivity, sets a final offer price within a previously announced range. The retail tranche then prices off that result.
What happens if I get less than I applied for?
If the retail tranche is oversubscribed, allocations are typically scaled down pro-rata. You receive a fraction of what you applied for, and the unused cash is automatically refunded to your brokerage or bank account within a defined window after listing.