Adnoc Gas, a subsidiary of Abu Dhabi’s main energy company, surged in its trading debut after raising $2.5 billion in the world’s biggest initial public offering so far this year.
(Bloomberg) — Adnoc Gas, a subsidiary of Abu Dhabi’s main energy company, surged in its trading debut after raising $2.5 billion in the world’s biggest initial public offering so far this year.
The shares rose as much as 25% to 2.97 dirhams, before paring some gains to end the day at 2.81 dirhams. Based on Monday’s close, Adnoc Gas is valued at 215.7 billion dirhams ($58.7 billion), roughly in line with Occidental Petroleum Corp.
State-owned Adnoc sold a 5% stake in the company, which made record earnings in the year through October as Russia’s invasion of Ukraine roiled energy markets and sent natural gas prices surging. Cornerstone investors including Abu Dhabi state-linked firms subscribed to $850 million worth of shares ahead of the final pricing announcement.
The stock priced at 2.37 dirhams per share — after being marketed at a range of 2.25 dirhams to 2.43 dirhams — even though investors placed over $124 billion of orders.
READ MORE: Adnoc Gas Draws $124 Billion of Orders for $2.5 Billion IPO
The deal is a sign of continued feverish appetite for IPOs from the Gulf, following on from last year’s strong showing, as governments try to fund a transition away from fossil fuels and bring more international investors into their markets.
Pricing of IPOs “is the key” and Abu Dhabi offerings have fared well on that front, said Faisal Hasan, chief investment officer at Al Mal Capital in Dubai. Adnoc Gas investors are “looking at dividend yields and with the strong backing, solid financials the stock was expected to do well,” he said.
Abu Dhabi Leads
The initial public offering is the biggest-ever in Abu Dhabi, surpassing chemicals firm Borouge’s $2 billion deal in mid-2022. In addition to Borouge, Abu Dhabi National Oil Co. has sold stakes in two units last year — Adnoc Drilling and fertilizer firm Fertiglobe, and is potentially working on a listing of its shipping unit, Bloomberg reported in November.
Abu Dhabi is likely to be at the forefront of the Middle East’s IPO market this year. At least eight companies are expected to list in the emirate, a senior government official told Bloomberg this month.
READ MORE: Abu Dhabi Says There’s More to Come After Year’s Biggest IPO
Potential deals span industries from technology to media and asset management. G42, an Abu Dhabi-based artificial intelligence company, is considering at least six IPOs, while Investcorp Holdings is weighing an offering of its investment vehicle in the emirate in the first listing of its kind in the region, Bloomberg reported.
First Abu Dhabi Bank PJSC and HSBC Holdings Plc led Adnoc Gas’s IPO.
(Updates with closing price and market cap in second paragraph)
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