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Adnoc Gas completes record-breaking $2.5bn ADX IPO

Sultan al-Jaber, head of state oil giant Adnoc and UAE climate envoy, at Abu Dhabi Sustainability Week Reuters/Rula Rouhana
Sultan al-Jaber, head of state oil giant Adnoc and UAE climate envoy, at Abu Dhabi Sustainability Week

Adnoc has raised $2.5 billion from the initial public offering of its gas business, recording the largest ever listing on the Abu Dhabi Securities Exchange.

Five percent of the company, or around 3.84 billion shares, were sold at AED2.37 ($0.64) per share, in the upper half of a range that began at AED2.25, according to a statement. 

The stake in the Abu Dhabi National Oil Company was raised from 4 percent earlier this week “based on significant investor demand across all tranches”.

The listing values Adnoc Gas in the region of $50 billion.

Orders worth $124 billion were submitted by investors with the IPO oversubscribed by more than 50 times, making it the highest total demand for an IPO in the Middle East and Africa, according to the statement from Adnoc.

Khaled Al Zaabi, Adnoc group CFO, described the IPO as a “truly historic listing”.

Vijay Valecha, chief investment officer, Century Financial, told AGBI the IPO has come at an “opportune moment” in the global race to secure a carbon-free future and the important role natural gas can play in the transition.

“Adnoc Gas is in an advantageous position to seize this trend, thanks to its daily production capacity of 10 billion standard cubic feet of gas,” Valecha said.

“Additionally, with geopolitical tensions lingering in the backdrop and China’s reopening leading to an upswing in natural gas demand this year, Adnoc Gas shares could enjoy strong demand.”

Adnoc will continue to own a majority 90 percent stake in the company.

Abu Dhabi Pension Fund, Alpha Wave Ventures II, LP, IHC Capital Holding LLC, OneIM Fund I LP, and entities ultimately controlled by ADQ and the Emirates Investment Authority are the cornerstone investors.

Admission to the Abu Dhabi Securities Exchange (ADX) is expected to take place at 10am on March 13.

The company announced in November it was combining its gas processing arm and its liquefied natural gas subsidiary into a single listed entity.

Over the past two years, Adnoc has listed petrochemicals company Borouge – which previously held the record listing on ADX after raising $2 billion in 2022 – fertilisers and clean ammonia products maker Fertiglobe, and Adnoc Drilling. It also plans to float its logistics and services unit.

Companies from the Middle East raised some $21.9 billion through IPOs in 2022, more than half the total for the wider Emea region, which also includes Europe and Africa, according to Dealogic data.

Mohamed Khalifa Al Hadari, deputy CEO of the Emirates Securities and Commodities Authority, told the inaugural Mena IPO Summit in Dubai earlier this year that there are 11 initial public offerings (IPOs) “waiting in the pipeline” in the UAE.

Faisal Hasan, chief investment officer and head of asset management at Al Mal Capital in Dubai, said the latest Adnoc Gas IPO had raised the bar for the ADX and other exchanges in the region.

“The listing and pricing definitely paves the direction for future listings and the pipeline in the region, especially the UAE, looks to be strong,” Hasan said.

“Markets are looking for strong investment stories and an IPO with a strong background, market positioning and financial flexibility will continue to attract both regional and international investors.”