Israel Eyes US IPOs for Iron Dome, Arrow Missile Makers to Raise Funds

Israel is reportedly exploring initial public offerings (IPO) in the US for its state-owned defence manufacturers, Israel Aerospace Industries (IAI) and Rafael Advanced Defense Systems, according to a Bloomberg report.

The two companies manufacture some of Israel's most advanced defence systems, including the Arrow ballistic missile interceptor and the Iron Dome air defence system. A delegation plans a mid-July visit to the US to evaluate primary and dual-listing structures.

Valuations are running high. The government plans to divest minority stakes of up to 30% in both companies by the end of the year, the report said. IAI could be valued at approximately 100 billion shekels ($33.7 billion). Rafael may command a valuation of roughly 60 billion shekels, it added.

The visiting delegation will include officials from Israel's Government Companies Authority, the finance and defence ministries, and representatives from both firms. They will meet investment banks, institutional investors, legal advisers, and regulators to understand how US securities rules apply to classified defence programmes.

Why Iran Choosing US Listing

US regulators offer distinct advantages. They are viewed as more accommodating than their Israeli counterparts, offering greater flexibility and exemptions on sensitive national security disclosures.

Currently, Israel maintains a dual-listing framework. This allows companies listed on the NYSE or Nasdaq to list subsequently on the Tel Aviv Stock Exchange while complying primarily with US disclosure rules.

The share sales aim to support public finances. The Bank of Israel projects the national fiscal deficit will widen to 5.3% of GDP this year, following significantly increased defence spending since the October 2023 Hamas attacks.

Authorities are also considering governance reforms, including easing executive compensation limits and streamlining operational approvals, to boost global competitiveness, Bloomberg reported.

Subsidiaries and Financial Growth

Both companies carry massive forward orders. In 2025, IAI reported record revenue alongside an order backlog exceeding $30 billion, with overseas sales generating 70% of its business. Rafael recorded a backlog crossing $20 billion, with approximately 50% stemming from international customers.

The US visit will also examine whether independent subsidiaries can list overseas. IAI and Rafael each own around 40 subsidiaries. Authorities want to determine whether these units can list internationally without requiring separate government approval. Rafael listed its maritime security subsidiary, DSIT Solutions, on the Tel Aviv Stock Exchange earlier this year.

The broader privatisation process faces domestic hurdles. The government approved the IAI plan years ago, but progress stalled over public disclosure concerns.

Rafael still awaits formal government approval and faces potential delays if parliament dissolves ahead of anticipated elections. The timeline, size of the stake sale and choice of listing venue remain under consideration and could still change, the report added.