NMDC Energy’s shares surge above 20% on trading debut

Shares of NMDC Group’s energy unit, NMDC Energy, soared on its trading debut on Wednesday after the company raised $877m (Dhs3.22bn) in what is the UAE’s biggest listing so far this year.

NMDC Energy’s shares started trading at Dhs3.35, against its initial public offering (IPO) price of Dhs3.15, rising as much as 20 per cent, valuing the company at $4.3bn (Dhs15.8bn) as at 11.30 am GST.

The construction and dredging services firm offered 1.15 billion shares in NMDC Energy, and the offering was 31.3 times oversubscribed, excluding cornerstone investors, receiving Dhs88bn in demand.

Al Ataa Investment was the cornerstone investor, and it agreed to buy 142.5 million shares, representing approximately 12.39 per cent of the offering.

The IPO is the biggest in the UAE so far this year, eclipsing Alef Education Holding’s $515m share offering in June.

The GCC region’s listing activity gathered pace since 2021 as governments sold stakes in state-owned businesses to reduce their reliance on the energy sector.

Founded in 1973, the company has executed more than 1,200 projects, including approximately 1,360 installed structures, 8,000 km of laid pipelines, and 2,000 km of marine cables.

NMDC Group previously invested in the IPOs of ADNOC Gas and ADNOC L&S. The Alpha Dhabi-backed company has won contracts from ADNOC Group to work on several projects this year, such as a $200m dredging contract for a natural gas export facility.

The group’s half-year net profit rose by 66 per cent to Dhs1.46bn compared to Dhs881m in the same period a year ago, while its revenue jumped 79 per cent to Dhs12.1bn. Its assets in the January-June period increased by Dhs7.7bn to Dhs28.5bn compared to Dhs20.8bn for the corresponding period in 2023.

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