Adnoc Gas, a subsidiary of Abu Dhabi’s major energy company, surged in its trading debut after raising $2.5 billion in the world’s largest initial public offering so far this year.
Shares rose as much as 25% to 2.97 dirhams, before paring some gains to finish the day at 2.81 dirhams. As of 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 posted record profits in the year to October as Russia’s invasion of Ukraine rattled energy markets and pushed up prices of natural gas. Core investors, including companies linked to the state of Abu Dhabi, subscribed $850 million worth of shares ahead of the final price announcement.
The stock was priced at 2.37 dirhams per share, after trading in a range of 2.25 to 2.43 dirhams, although investors placed orders of more than $124 billion.
The deal is a sign of continued feverish appetite for Gulf IPOs, following a strong showing last year, as governments try to finance a transition away from fossil fuels and attract more international investors to their markets .
The price of IPOs “is the key” and the Abu Dhabi deals have done well in that regard, said Faisal Hasan, chief investment officer at Al Mal Capital in Dubai. Investors in Adnoc Gas are “looking at dividend yields and with the strong support and strong financials, the stock was expected to do well,” he said.
Abu Dhabi leads the way
The initial public offering is Abu Dhabi’s largest ever, surpassing chemical company Borouge’s $2 billion deal in mid-2022. In addition to Borouge, Abu Dhabi National Oil Co. has sold stakes in two units in the past year: Adnoc Drilling and fertilizer company Fertiglobe, and is potentially working on a listing of its shipping unit, Bloomberg reported in November.
Abu Dhabi is likely to lead the Middle East IPO market this year. At least eight companies are expected to exit the emirate, a senior government official told Bloomberg this month.
Potential deals span sectors 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 offer of its investment vehicle in the emirate in a first-of-its-kind listing in the region, Bloomberg reported.
First Abu Dhabi Bank PJSC and HSBC Holdings Plc led the Adnoc Gas IPO.
