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Adnoc Logistics & ServicesThe marine logistics unit of Abu Dhabi’s major energy company surged 49 per cent in its first day of trading after its initial public offering (IPO) was massively oversubscribed at $769 million.
Shares in Adnoc L&S opened at Dhs2.91 on Thursday, above the issue price of Dhs2.01, the top of the market range.
ADNOC sold 1.41 billion shares, or a 19 percent stake, in the company in an IPO valuing it at $4.05 billion.
The offering attracted overwhelming investor demand, with a total order book of $125 billion, surpassing the level of Saudi Aramco’s record $29.4 billion IPO, which garnered demand of more than $119 billion.
Adnoc increased the size of its IPO by more than a quarter amid strong investor interest.
Today we mark the historic listing of ADNOC Logistics & Services @ADX_AE After the IPO attracted record investor demand.#EnergyForLife
— ADNOC Group (@ADNOCGroup) June 1, 2023
The results of Adnoc L&S and the level of demand for its IPO suggest continued interest in listing in the Gulf.Still, deal volume was down 69 percent from a year ago at $3.5 billion, excluding the latest listings, as reported by Bloomberg exhibit.
Oil prices surged after the Ukraine crisis erupted last year, but have since fallen on concerns that an economic slowdown could weigh on energy demand.
That, in turn, has hurt equity markets in the Gulf region, with the MSCI GCC countries index down nearly 18% over the past year.
State-owned Adnoc raised $2.5 billion earlier this year through the listing of its natural gas business, a deal that has also scaled up, eventually attracting $124 billion in orders.
Investors are drawn to initial public offerings in the region by high dividend yields, which are attractive in an environment of rising interest rates.
Adnoc has been selling stakes in its unit since around 2017 to help fund diversification of the economy and reduce reliance on fossil fuels. It took chemicals company Borouge public last year and has previously sold stakes in its drilling unit and fertilizer company Fertiglobe, among others.
Citigroup, First Abu Dhabi Bank, HSBC Holdings and JP Morgan are joint global coordinators for the Adnoc L&S IPO.
read: ADNOC Logistics secures $125 billion order in $769 million IPO
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