ADNOC IPO successful but below hoped valuation

Bloomberg said ADNOC raised $851 million from the sale of 1.25 billion shares. Sultan Ahmed Al Jaber, chief executive officer at ADNOC had announced a share sale for its retail fuel stations unit at the Abu Dhabi Petroleum Exhibition & Conference (ADIPEC).

“We will go at least 10 per cent of the shares we plan to float on the ADX market,” said Al Jaber. “But we’re not seeking a valuation.”

Bloomberg said that when the company initially set a guidance for its fuel-distribution IPO between 2.35 dirhams to 2.95 dirhams per share, it implied a valuation of just above $10 billion, but at $2.50, the valuation was $8.5bn, and sold just 10 per cent in this IPO.

About 90% of Adnoc Distribution shares were bought by qualified investors, while close to 10 percent were sold to individuals, according to to ADX CEO Rashed Al Baloushi, who said a total of 12,000 investors from 73 countries participated in the IPO’s subscription.

“The offering was multiple times oversubscribed on the qualified investor tranche at a price of AED 2.50 per share. The retail or individual investor tranche of the offering was oversubscribed by 22 times on the original retail tranche size,” he said.

“Owing to this exceptional level of oversubscription, it was decided to increase the retail tranche size to 10 percent of the offering, allowing retail investors to further participate in this unique opportunity,” he added.