Adnoc Logistics & Services, a subsidiary of Adnoc, is poised to generate approximately $769M through the sale of a 19 percent stake in its highly oversubscribed IPO on the Abu Dhabi Securities Exchange.
The company has finalized its initial public offering price at the higher end of the range. it is at AED 2.01 per share, resulting in a valuation of $4.05B for the company, according to The National Business News.
In response to strong demand, Adnoc L&S increased the allocation of shares to retail investors in its IPO. The retail portion of the offering now consists of over 1.4 billion shares. it accounts for 19 percent of the total shares available, surpassing the previously announced 15 percent.
The offering was significantly oversubscribed by local, regional, and international investors, with total gross demand amounting to more than $125B, which implies an oversubscription level of 163 times on average, “the highest-ever oversubscription level for a UAE book-build IPO”, Adnoc said.
The listing is the sixth the global energy company “has successfully brought to market within five years and marks the next remarkable achievement in our ongoing value creation programme”, said Adnoc group chief financial officer Khaled Al Zaabi.
Adnoc L&S listing
Adnoc Logistics & Services has scheduled the commencement of trading on the Abu Dhabi Securities Exchange for June 1. The company will trade under the ticker symbol “ADNOCLS” and the international securities identification number AEE01268A239.
Adnoc will retain an 81 percent ownership stake in the company, following the IPO.
Several prominent entities, including Al Seer Marine Supplies and Equipment, the National Marine Dredging Company, Alpha Oryx (ultimately owned by the Abu Dhabi Development Holding Company), and the Abu Dhabi Pension Fund, have expressed their intention to become cornerstone investors in the IPO. Their combined commitment amounts to approximately $180M, either directly or indirectly.
“Adnoc L&S is a highly attractive value proposition, underpinned by strong and long-term growth credentials and a progressive dividend payout,” Al Zaabi said.
In a recent announcement, Adnoc Logistics & Services disclosed its plan to distribute dividends twice per fiscal year.
The IPO of Adnoc L&S takes place amidst a wave of listings in the Gulf region, with Dubai aiming to strengthen its capital markets.
IPOs in the Middle East
In 2022, Middle East IPOs generated over $23B, a significant increase compared to the previous year’s 20 offerings that amassed $7.52B. This figure represented the largest share in the Gulf region since 2019 when Saudi Aramco conducted its monumental $29B IPO, the world’s largest.
According to a report by consultancy firm EY, Abu Dhabi accounted for 14 percent of global listings during the first quarter of 2023, showcasing the resilience and robustness of its capital markets amidst a challenging global IPO landscape.
In the first quarter, Abu Dhabi attracted $3B in listing proceeds, positioning it third worldwide.
The Adnoc L&S IPO had joint global coordinators including Citigroup, First Abu Dhabi Bank, HSBC, and JP Morgan.
