Abu Dhabi's next powerhouse IPO - from ADNOC Drilling - will have a lot going for it. The Dh2.30 offer price has an underlying premium, and investors will not mind that. Not a bit. Image Credit: Supplied

Dubai: There is much to interest UAE and overseas investors in the ADNOC Drilling IPO, with the offer price set at Dh2.30 a share and implying an equity value of an impressive $10 billion. The 7.5 per cent float of ADNOC Drilling has already pulled in a heavy US commitment, in the form of Helmerich & Payne, a company that specialises in rig technologies.

The Dh2.30 "offer price was determined by ADNOC, as the selling shareholder, and ADNOC Drilling, following investor engagement that saw significant strong initial demand indications from both local and international investors, ahead of the start of the subscription period, which opens today," said the Abu Dhabi energy giant in a statement. "ADNOC and ADNOC Drilling believe the offer price per share provides investors with a highly attractive value proposition that reflects ADNOC’s long-term confidence in ADNOC Drilling’s growth trajectory.

"This decision also reflects ADNOC’s prioritization of a supportive aftermarket performance post-listing."

IPO frenzy
The Abu Dhabi stock market is well placed at a Dh1.38 trillion capitalisation, easily making it one of the best performing ones around. After ADNOC Drilling, Abu Dhabi Ports will get its own IPO underway.

And there is also a potential one from the biggest name yet - Emirates Global Aluminum (EGA).

The subscription period for the ADNOC Drilling IPO opens today and will close on September 23 for UAE retail investors and on September 26 for qualified domestic and international institutional investors. ADNOC Drilling is expected to list on the ADX on or around October 3.

According to Vijay Valecha, Chief Investment Officer at Century Financial, "The offer price of Dh2.30 appears to be a very attractive price set for investors, and one which would imply continuing growth. The listing would add $750m of free float to the ADX market and increase the market cap by $10 billion.

"The listing price would mean the stock could initially be trading at less than five times revenue, which is a great offering for a high dividend paying company."