Abu Dhabi's Borouge $2b IPO receives subscriptions of $83.4b

Dubai: The Borouge IPO has received subscriptions of a staggering $83.4 billion plus, setting up another successful stock market listing in Abu Dhabi. The subscriptions are 42 times the offer size of $2 billion, as investors - retail and institutional - pile into the mega-offer.

The Borouge stock will start trading on ADX from June 3, this being the second big one this year after AD Ports Group.

ADNOC will now own a 54 per cent stake in Borouge, which operates a massive industrial complex in Ruwais. The Austrian petrochemicals giant Borealis ME will hold 36 per cent.

Entities such as Abu Dhabi’s International Holding Company, Multiply Group, Alpha Dhabi Holding, ADQ, Abu Dhabi Pension Fund and Emirates Investment Authority are among the blue-chip investors, as is Gautam Adani, the Indian billionaire. They as ‘cornerstone investors’ will hold a combined 28.4 per cent.

These investors will not offer, sell or announce an offer of any shares they have acquired under the cornerstone investment agreements during a period of not less than six months following admission to list on ADX.

Subscriptions and payback

The size of the first tranche (reserved for UAE retail and other individual investors) was set at 10 per cent, and that of the second - reserved for local, regional and international qualified institutional investors - was 88 per cent.

A third tranche of 2 per cent was reserved for employees of ADNOC Group companies residing in the UAE, ADP and PTE employees residing in the UAE, employees of Borealis residing in the UAE, and retired UAE nationals from ADNOC, Borealis, and ADP and PTE.

Investors from the first and third tranches will receive an SMS confirmation of their respective allocation on June 2. (Total demand across Tranches 1 and 3 was $17.9 billion, which is more than 74 times oversubscribed.)

According to Vijay Valecha, Chief Investment Officer at Century Financial, "The massive demand for Borouge IPO confirms that UAE fundamentals remain rock solid. Participation from reputed global institutions like Fidelity proves UAE markets have rose in prominence this year.

"The DEWA IPO had also witnessed a similar participation from across the globe. It is worth noting that FTSE ADX is the seventh best perfoming country index globally this year with a gain of 17.51 per cent. As for Borouge, the company manufactures polyolefin solutions, which are expected to see a rise in demand and it offers an almost 5 per cent dividend yield, which is attractive for income investors."