The last day to subscribe to the Adnoc Distribution share sale is on Wednesday and Thursday for retail and qualified investors respectively, before it gets listed on Abu Dhabi Securities Exchange next week on December 13.
The Adnoc unit is looking to raise $2.8 billion by selling a maximum of 20 per cent in the company or 2.5 billion shares and the unit has been priced in between Dh2.35 and Dh2.95 per share. The expected pricing announcement will be made on Friday.
“The appetite is there. It is likely that retail segment will be oversubscribed,” said an analyst who wished not to be named. “The major difference this time around is that banks are willing to give the leverage,” which could help in increasing bids for the offer.
Plus, the Adnoc unit can offer investors the much required diversification needed on the UAE bourses.
“The clinching argument for this IPO is that the retail unit have an explicit agreement with the parent company on the margin for 5 years. This provides them a visibility on the dividend,” the analysts added.
The company has indicated of a special dividend of Dh200 million in April next year followed by at least $400 million for the fiscal year ending 2018. The company aims to distribute 60 per cent of its net profit adjusted for legal reserves.
First Abu Dhabi Bank, which is the lead arranger for the IPO, had noted of a healthy appetite for the primary listing.
“There is a clear interest in the market for the IPO, due to the long-established history that Adnoc has built and the high level of trust it reaps in the market,” André Sayegh, FAB deputy group CEO and head of corporate and investment banking, said in a statement last week.