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The sale is the second public flotation of a company owned by the Abu Dhabi oil major after the 2017 listing of ADNOC Distribution, the largest operator of petrol stations and convenience stores in the UAE. Image Credit: Supplied
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Dubai: ADNOC Drilling, Abu Dhabi National Oil Co.’s drilling unit rose as much 33 per cent on its trading debut, after raising Dh4.05 billion ($1.1 billion) in the emirate’s biggest ever listing.

The share closed at Dh2.95 on Sunday, 28.2 per cent above the 2.30 offer price, in the latest sign of high investor demand for new listings in the Middle East.

The company is now worth about Dh48 billion, making it the ninth most valuable listed firm in the UAE.

ADNOC Drilling had boosted the offer size in September and drew $34 billion in total orders amid a surge in demand for listings in the Middle East, where Abu Dhabi is catching up with regional leader Saudi Arabia. The emirate’s efforts to boost its local exchange seem to be paying off with a clutch of offerings set to raise billions of dollars. ADNOC is also planning to list its fertilizer joint venture as soon as October.

Key milestone

Abu Dhabi, which holds most of the oil in the UAE, is using its energy assets to draw in global investors along with their funds and expertise as the nation puts cash into efforts to diversify the economy.

The latest listing comes as commodity prices soar, with oil trading at a three-year high. ADNOC Drilling is the largest national drilling firm in the Middle East by fleet size, with 96 owned rigs.

This important milestone will bolster the expansion and diversification of Abu Dhabi's equity capital markets and further the development of the UAEs economy and private sector

- ADNOC

The IPO is the latest move by Gulf oil giants ADNOC and Saudi Aramco to raise cash from outside investors as they try to diversify sources of income in their oil-dependent economies. Saudi Aramco listed in late 2019, raising $29.4 billion in the world’s biggest IPO.

ADNOC will continue to own an 84 per cent majority stake in the unit, while Baker Hughes will retain its 5 per cent shareholding. Helmerich & Payne will hold 1 per cent through its IPO cornerstone investment.

ADNOC increased the size of the IPO to 11 per cent of share capital because of oversubscription. It had previously targeted selling a minimum stake of 7.5 per cent.