ADNOC Gas raises IPO size to $2.5bn on heavy demand
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ADNOC Gas IPO raises $2.5bn, attracts $124bn in demand

ADNOC Gas IPO raises $2.5bn, attracts $124bn in demand

The company increased the number of ordinary shares offered in the IPO to 3.8 billion on Monday, implying market capitalisation of Dhs182bn

Kudakwashe Muzoriwa
ADNOC Gas raises $2.5bn from IPO

ADNOC Group has completed book-building for the initial public offering (IPO) of its gas business, ADNOC Gas, raising $2.5bn in what is Abu Dhabi’s largest listing after Borouge’s $2bn deal in mid-2022.

The state-owned energy giant, which increased its offering to 5 per cent, said ADNOC Gas’ IPO was heavily oversubscribed, taking the total demand to more than $124bn.

Initially, ADNOC planned to raise $2bn by offering a 4 per cent stake. The company increased the number of ordinary shares offered in the IPO to 3.8 billion on Monday at $0.64 (Dhs2.37) apiece, implying a market capitalisation of Dhs182bn at the time of admission.


Read: ADNOC Gas eyes $2bn from world’s biggest IPO this year

The state-owned energy giant said retail investors put in orders for $23bn, over 58 times the shares reserved for them, the highest-ever level of demand for retail tranches in a MENA IPO to date.

Upon listing, ADNOC will continue to own around 90 per cent majority stake in the unit while Abu Dhabi National Energy Company (TAQA) will retain its 5 per cent shareholding. ADNOC Gas is expected to list on the Abu Dhabi Securities Exchange (ADX) on March 13, subject to customary closing conditions, under the ticker symbol ‘ADNOCGAS’.

“This truly historic listing is the fifth company ADNOC has successfully brought to market in as many years, with the unparalleled level of investor interest reinforcing both the attractiveness of ADNOC’s low-carbon intensity energy asset base,” said Khaled Al Zaabi, group chief financial officer of ADNOC Group.

First Abu Dhabi Bank and HSBC Holdings are the lead banks on the IPO. Abu Dhabi Commercial Bank, Arqaam Capital, BNP Paribas, Deutsche Bank, EFG-Hermes and International Securities are joint bookrunners.

ADNOC Gas, which has a production capacity of 10 billion cubic feet a day across eight onshore and offshore sites, was created following the merger of ADNOC’s gas processing and LNG operations. It has a pipeline network of more than 3,250km and expects to pay dividends of $3.25bn for 2023.                                                                                                                                          

ADNOC Second-Gas-Discovery
ADNOC’s second gas discovery

ADNOC Gas’ oversubscribed IPO

Meanwhile, ADNOC Gas’ IPO is the latest in a string that ADX has attracted this year as the bourse has introduced an array of initiatives to revive primary issues in Abu Dhabi – part of the government’s broader strategy to diversify the economy and bring more international investors into their markets.

State-owned companies in the Gulf region are stepping up efforts to boost domestic equity markets while supporting regional governments’ efforts to diversify their economies away from heavy reliance on oil revenues.

Last year, the Dubai Government listed utility firm DEWA, business park operator TECOM and road-toll operator Salik while ADX is enjoying a flurry of listings including Borouge, Fertiglobe, ADNOC Drilling and Burjeel Holdings.

Arabian Drilling Company’s IPO is the latest deal in Saudi Arabia and other high-profile listings over the years include Saudi Tadawul, stc Group’s internet services unit, Arabian Internet and Communications Services Company and digital security firm Elm.

GCC stock markets are bracing for yet another year of record listing after Middle Eastern IPOs fetched $18bn in 2022, representing 47 per cent of the $38.2bn that was raised across Europe, the Middle East and Africa, according to Bloomberg.

Oman’s OQ plans to raise as much as $244m from the IPO of oil and gas drilling firm Abraj Energy Services on the Muscat Stock Exchange in what is going to be the Sultanate’s biggest public offering since 2010.

Also read: Oman Energy firm OQ to sell 49% stake in oil-drilling unit IPO

Kuwait-based asset management firm, KAMCO Invest, said the IPO pipeline for 2023 remains strong and “based on our estimates at the start of the year the pipeline could range between 27-39 companies between announced and rumoured GCC IPO issuances”.

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