Saudi Arabian group Al-Tayyar Travel is set to raise up to SR1.37 billion ($365 million) selling a 30 per cent stake in a listing in the first week of June, two sources familiar with the matter said.

The family-owned business group is offering 24 million shares to investors at SR45-57, two people familiar with the process said. The IPO is open to retail investors and expected to close on May 20.

The institutional part of the share sale has been oversubscribed nearly five times, arranging bank Samba Capital, the investment banking arm of Samba Financial Group, said earlier this week.

'Demand for the IPO has been strong from the institutional side. It has been priced attractively and most bids were at the top end of the range,' one person involved in the IPO process said, speaking on condition of anonymity.

Al-Tayyar first looked to go public in February 2010, planning to raise 1.2 billion riyals selling 30 percent of its shares. Lacklustre market conditions forced the family group to pull the process at the end of the institutional stage, the first time a Saudi IPO had failed to complete after receiving listing approval from the country's regulator.

Renewed investor interest in local markets and ample institutional liquidity was expected to see the firm launch its IPO at the top end of the range this time.

Saudi Arabian bourse Tadawul has risen 10.7 percent in 2012 on rising volumes. Talks of a potential opening-up of the market to foreign investors has lured investor interest.

Al-Tayyar's first-quarter net income rose more than 20 percent, a second source said, adding the firm has paid a dividend of around 5 riyals in the past couple of years.

IPO activity in the Gulf is showing signs of revival with bankers and analysts expecting Saudi Arabia to lead the region.

Health Water Bottling, a firm owned by Saudi Arabian conglomerate Olayan Group, is planning to go public by issuing 30 percent of its shares in a flotation in the first quarter of 2013, sources told Reuters in April.

Construction Products Holding, a manufacturer of building materials and a unit of Saudi Binladin Group, plans a 30 per cent listing and has mandated the investment banking arms of Gulf International Bank and Samba for the sale.-Reuters