Abu Dhabi’s main energy company has made waves in the financial world, with its subsidiary, Adnoc Gas, completing the largest initial public offering of the year. Adnoc raised an impressive $2.5 billion in funds, marking the start of what is expected to be a flurry of IPOs in the Gulf following the success of last year’s strong showing of $11 billion.
The investors responded positively to the IPO, with shares of Adnoc rising by 25% up to 2.97 dirhams in early trading. Despite the investors placing almost $125 billion of orders, the stock was priced at 2.37 dirhams which was in the middle of the marketed IPO range.
The state-owned Adnoc also sold a 5% stake in the company which resulted in record earnings throughout the year, despite the Russian invasion of Ukraine, which disrupted energy markets and led to high natural gas prices. Abu Dhabi state-linked firms, including cornerstone investors, subscribed to $850 million worth of shares before the final pricing announcement.
The successful IPO by Adnoc Gas highlights the continued appetite for IPOs in the Gulf as the government aims to fund a shift away from fossil fuels and attract more international investors to their markets. The success of the IPO comes right after the Adnoc Drilling Company purchased ten hybrid power land drilling rigs and aims to reduce the greenhouse gas emissions intensity of every rig by 10% to 15%. The Gulf has long been a critical player in the global energy market and with a renewed focus on sustainable energy sources, it is well-positioned to maintain its place as a leader in the industry.
Speaking on the topic, energy consultant Roudi Baroudi, head of the Qatar-based Energy and Environment Holding firm, said “There is every reason to expect that the massive oversubscription we saw will carry over into strong interest when the shares are floated publicly”.
This IPO is the largest ever in Abu Dhabi, surpassing the $2 billion deal made by chemicals firm, Bourouge in mid-2022. It follows the sale of stakes in two units by Abu Dhabi National Oil Co. last year – Adnoc Drilling and Fertiglobe, with a potential listing of its shipping unit. The IPO is also a clear indication of its commitment to sustainability, and its ability to adapt to the changing demands of the energy market.
Talking to Bloomberg, Sameh Al Qubaisi, director general of economic affairs at Abu Dhabi’s Department of Economic Development, said that at least eight companies are expected to follow in fields ranging from technology to asset management and regenerative medicine.
Overall, Adnoc Gas’s IPO success reflects the Gulf’s confidence in its economic prospects and demonstrates its commitment to transitioning towards more sustainable energy resources.
About Adnoc Gas
Adnoc is a leading diversified energy group, owned by the Abu Dhabi Government, founded in 1971. Their network of fully integrated businesses operates across the energy value chain, to meet the demands of an ever-changing energy market. Its subsidiary Adnoc LNG was the first LNG production company in the Gulf and was established in 1973.
In line with this trend, Adnoc has been expanding its renewable energy portfolio, investing in a range of renewable energy projects, including solar and wind power. The company has been exploring new technologies to reduce emissions and increase efficiency in its operations.