At Dh460 billion, ADNOC Logistics & Shipping draws highest IPO subscription in 2023
ADNOC entity drew in gross subscriptions of Dh460 billion for a '23 record
Dubai: The ADNOC Logistics and Shipping Services IPO has seen the 'largest demand globally' for a stock float so far this year, with gross demand hitting over $125 billion - or Dh460 billion. This is an oversubscription level of 163 times in aggregate - the highest-ever oversubscription level for a UAE book-build IPO.
The final offer price is Dh2.01 per share - at the top end of the previously announced price range of the IPO. That, analysts say, was an absolute certainty.
This is the second ADNOC entity listing this year - ADNOC Gas proved to be the second biggest IPO of the year when it came up with the final numbers.
The stock starts trading June 1. The float was initially supposed to be 15 per cent, but was raised to 19 per cent thereafter. The over-subscription levels, when it opened May 23, was 'in minutes', banking sources said.
Total demand across the tranches in the UAE retail offering amounted to more than $31 billion (and in excess of 269 times oversubscribed). It continues a pattern that has seen blue-chip UAE IPOs garnering heavy local investor interest from the get-go.
"This record-setting listing is the sixth company ADNOC has successfully brought to market within 5 years and marks the next remarkable achievement in our ongoing value creation program," said Khaled Al Zaabi, Group CFO of ADNOC.
"ADNOC L&S is a highly attractive value proposition, underpinned by strong and long-term growth credentials and a progressive dividend pay-out. Cementing our role as a critical catalyst in attracting global capital, ADNOC welcomes its new investor base to partake in our continued growth story, as we continue to deliver sustainable growth for Abu Dhabi, the UAE, and our shareholders."
Setting the price
The price range for the IPO was Dh1.99 to Dh2.01. Based on the final offer price, the offer size is around Dh2.83 billion ($769 million). "This offering saw the largest demand globally for an IPO this year-to-date and achieved the highest-ever oversubscription for a UAE bookbuild IPO," said Al Zaabi.
It all dovetails into an implied market cap on listing of around Dh14.9 billion (or $4.05 billion).
The latest ADNOC listing will in all likelihood jazz up ADX volume numbers through June, and should help the exchange recover ground compared to its 2022 run.
ADNOC will have 81 per cent stake in the company, while Al Seer Marine Supplies & Equipment Co., National Marine Dredging Company, Alpha Oryx Ltd. (ultimately owned by Abu Dhabi Development Holding Company), and Abu Dhabi Pension Fund are the cornerstone investors.
This is how the shares will be distributed:
- The first tranche was set at 12%.
- The size of the second tranche - reserved for those in the professional investor offering) was set at 85% of the float.
- The size of the third tranche - reserved for employees of ADNOC Group and residing in the UAE and UAE National retirees of ADNOC residing in the UAE - made up 3%.
- The UAE retail offer subscribers will receive an SMS confirmation of their respective allocation on May 30.