In one sentenceA company offering part of its shares to the public for the first time in preparation for listing and trading them on the stock market, after approval by the market regulator.
Simply put
Through it, the company moves from limited ownership to a listed company whose shares are traded by the public. The offering may consist of new shares that raise money for the company, or existing shares sold by the current owners.
It requires greater disclosure afterwards: audited periodic financial statements, governance, and compliance with market regulations.
Worked example
A company with 10,000,000 shares offered 30% of them for public subscription at 20 SAR per share.
Shares offered10,000,000 × 30% = 3,000,000 shares
Market value of the company at the offer price10,000,000 × 20 = 200,000,000 SAR
Offering proceeds = 3,000,000 × 2060,000,000 SAR