Muscat: Analysts have reacted cautiously to Nawras, setting a lower band of 702 baizas and an upper band of 902 baizas, for its upcoming IPO of 40 per cent of the company's shares.

"The lower end of the band [702 baizas] is good, but the upper end of the band [902 baizas] seems a bit aggressive," Shankar Kailasam, Senior Vice-President Asset Management with the Gulf Baader Capital Markets, told Gulf News yesterday.

"The upper end of the band looks aggressive, particularly for the retail investors," he said.

In Kailasam's opinion, institutional investors were sitting on cash so they wouldn't have a problem with the upper end of the band too. He also reckons that the upper end of the band was an 11-times multiple, compared to other groups in the region.

However, he's optimistic that the IPO may attract regional investors. "There are not many IPOs in the region and Nawras has Qtel backing, so regional investors may take interest in this IPO."

He sees Nawras IPO as good on the one-year horizon as the company has several positives. "They have the benefits of both an international gateway and fixed line services," he said.

He also feels that a portion of the local market could get a kick as a result of the introduction of Nawras IPO and this may lead to regional funds remaining in the country.The Nawras IPO price includes an issue expense of two baizas per share. The share price range implies an initial market capitalisation of between 456 million to 586 million riyals, making Nawras a top five company in value.

The Nawras IPO opens for subscription from September 15 and closes on October 14.

Category I investors will initially subscribe at the top of the price range at 902 baizas. Any refunds will depend on the final pricing and the final allocation of shares to investors.

Seventy per cent of the offering is open to Category I investors and 30 per cent is open to Category II investors who will participate in the bookbuilding process.

Category I investors can apply for a minimum of 500 shares in multiples of 100 up to a maximum of 500,000 shares and Category II investors can apply for a minimum of 500,100 shares up to a maximum of 26,037,700 shares, or 10 per cent of the offer.

The final share price will be determined on the basis of the bookbuilding process and is expected to be announced on the October 24. All investors will be allotted shares at the final share price, which may be lower than the subscription price for Category I investors.

Nawras shares are expected to be listed on the Muscat Securities Market (MSM) on October 27.

The IPO, which is expected to raise between 182 million riyals (Dh183.76 million) and 234 million riyals, will be the first IPO in Oman since July 2008.

  • 902 upper band of Nawras IPO in baizas
  • 40% percentage of Nawras shares in the IPO
  • Investors who would like to participate in the Nawras IPO should collect a prospectus and application form from a branch of Bank Muscat, National Bank of Oman, Oman Arab Bank or Ahli Bank, or download a copy from the CMA website.
  • Category I investors wishing to subscribe to between 500 and 500,000 shares should submit their completed application form and subscription money to a branch of Bank Muscat, National Bank of Oman, Ahli Bank or Oman Arab Bank before the close of official working hours on the 14th October 2010.
  • There are two categories of investors who may apply. Category I investors are Omani and non-Omani investors who may apply for a minimum of 500 shares and in multiples of 100 shares thereafter up to a maximum of 500,000 shares.
  • Category II investors are institutions and individual investors who may apply for a minimum of 500,100 shares and in multiples of 100 shares thereafter up to a maximum of 26,037,700 shares.