Adnoc Gas Jumps 25% in Abu Dhabi After $2.5 Billion IPO

Mar 13, 2023 by Bloomberg
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The Etihad Towers surrounded by residential and commercial properties in Abu Dhabi. Photographer: Christopher Pike/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 in early trading in the emirate. The stock priced at 2.37 dirhams per share — after marketing it at a range of 2.25 dirhams to 2.43 dirhams — even though investors placed over $124 billion of orders.

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.

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.

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 Leads

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 analyst comment in sixth paragraph.)

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By Leen Al-Rashdan

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