Dkhoni stake deal sharpens IPO push

Alt Capital has acquired a significant minority stake in Dkhoni, placing one of the region’s fast-growing fragrance retailers on a clearer path towards a planned public listing within 18 months.

Riyadh-based Alt Capital, a private equity firm regulated by the Capital Market Authority, said the investment will support Dkhoni’s expansion, strengthen its operating platform and prepare the business for public market scrutiny. The fragrance company generates more than SAR600 million in revenues and has built its growth around perfumes, oud, incense and related products aimed at consumers across Saudi Arabia and the wider Gulf.

The deal adds momentum to a consumer-sector investment trend in Saudi Arabia, where local brands in beauty, food, healthcare, education and speciality retail have attracted institutional capital as investors look beyond energy-linked assets. It also comes as fragrance companies gain greater visibility in the Kingdom’s equity market, helped by strong demand for oud, Arabian blends and premium personal-care products.

Dkhoni’s founder, Rayan bin Hzam, described the transaction as a significant milestone for the company, saying the partnership positions it to accelerate expansion and pursue its listing ambitions. The company has developed a retail and online presence built around a distinctive brand identity, a loyal customer base and a product range that blends traditional Gulf fragrance culture with contemporary packaging and pricing.

Alt Capital’s chief executive, Abdullah Altobaishi, said the investment fits the firm’s mandate to back leading businesses that can create long-term value and prepare for public market readiness. Managing Director Karim Burhani said the firm sees scope to improve scale and operational performance as it works with Dkhoni’s management team.

The financial terms of the transaction were not disclosed. The phrase “significant minority stake” indicates Alt Capital will have meaningful exposure to Dkhoni’s upside without taking control of the company. Such structures are increasingly common in growth-stage private equity deals, where founders retain leadership while institutional investors help professionalise governance, reporting, logistics, store economics and capital-market preparation.

Dkhoni’s planned IPO timetable will require several steps before any listing can proceed. These include strengthening audited financial reporting, refining corporate governance, assessing valuation, selecting advisers, choosing a listing venue and securing regulatory approvals. The company will also need to demonstrate that its revenue growth can be converted into sustainable margins, particularly in a market where discounting, rental costs, inventory management and online customer-acquisition expenses can weigh on profitability.

Saudi Arabia’s perfume market remains one of the largest in the region, supported by cultural demand for oud, bakhoor and concentrated oils, as well as rising consumption of international-style eau de parfum products. Industry estimates place the Kingdom’s perfume market in the multibillion-dollar range, with steady growth expected through the next decade. E-commerce is also reshaping the sector, giving domestic fragrance houses a route to reach younger customers without relying solely on mall-based retail networks.

Consumer behaviour has shifted in favour of accessible luxury, a trend that benefits fragrance brands. Perfumes are often viewed as affordable premium purchases, allowing shoppers to trade up without the higher cost associated with luxury fashion or jewellery. Social media marketing, influencer-led launches and limited-edition bundles have become important tools for brands trying to capture repeat purchases.

Dkhoni’s challenge will be to convert brand recognition into an investable equity story. Public market investors are likely to examine store productivity, online sales growth, repeat-customer rates, working capital discipline and expansion plans across Gulf markets. The company’s ability to protect margins while managing promotions will be central to its valuation.

The deal also reflects growing private equity interest in founder-led companies that can be prepared for listings on the Saudi Exchange or Nomu, the parallel market. Saudi Arabia’s capital markets have hosted a broad range of listings in consumer, healthcare, technology and industrial sectors, though investor appetite has become more selective. Companies with clear earnings visibility, strong governance and defensible brands are better placed to attract demand.