Shares of Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, surged as much as 23 per cent as the company made its debut on the Abu Dhabi Securities Exchange on Friday.
The company, which started trading under the ticker symbol “Borouge”, ended the day with a market value of about Dh90.17 billion ($24.57bn) and its share price gaining more than 22 per cent to settle at Dh3.
The company's initial public offering “demonstrates our ongoing contribution to support the diversification of Abu Dhabi’s buoyant and dynamic equity capital market”, said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Adnoc managing director and group chief executive, and Borouge chairman.
The listing “reinforces Adnoc's continued role as the critical enabler of growth and expansion of the UAE economy and private sector, and in solidifying Abu Dhabi’s position as a global investment destination of choice”, Dr Sultan said on Friday.
“As part of our ongoing value-creation programme, we will continue to unlock opportunities to expand our investor base and access to capital, while providing domestic and international investors with the opportunity to invest and partake in the growth of our world-class portfolio of energy assets.”
Borouge successfully closed its $2bn listing on Tuesday, the biggest share sale on the ADX. The IPO, which was about 42 times oversubscribed, is the largest in Abu Dhabi since Adnoc Drilling’s $1.1bn offering.
The company sold about three billion shares to the public and had set the price per share for its 10 per cent float at Dh2.45 ($0.67). The proceeds of the transactions will go to selling shareholders ― Adnoc and Borealis Middle East Holding, a wholly owned subsidiary of Borealis.
Total gross demand for the IPO, which also attracted India's billionaire Adani family, amounted to more than $83.4bn.
“High investor interest in Borouge demonstrates the untapped potential and value of UAE companies for local and global investors. This is a defining moment for the UAE’s capital and regulatory markets,” said Ahmed Al Zaabi, chairman of the Abu Dhabi Global Market, where Borouge is registered.
Borouge is the fourth Adnoc subsidiary that has listed on the ADX, the second-biggest Arab stock market. Adnoc retains 54 per cent ownership in the company while Borealis controls 36 per cent.
Established in 1998, Borouge is a petrochemical company that employs more than 3,100 people and serves customers in more than 50 countries across the Middle East, Africa and Asia.
It provides polyolefin solutions for the agriculture, infrastructure, energy, advanced packaging, mobility and healthcare industries.
“Despite the macroeconomic turbulence that continues to pose a threat to global markets, the UAE still manages to hold its stance as a promising and resilient equity market,” said Mohamed Fahmi, EFG Hermes’ co-head of investment banking.
“The nation’s recent IPOs, which boomed particularly in 2021, have garnered significant investor interest, solidifying the UAE’s position as a highly favourable destination for equity investors.”
The Abu Dhabi bourse gained 17 per cent in the first quarter of this year, with its market capitalisation more than doubling in 2021. The ADX had a market value of about Dh2.03 trillion ($554bn) on Friday.
In addition to Adnoc Drilling's debut on the exchange last October, eight other companies listed on the ADX in 2021.
Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, raised about $795 million from its listing.
Alpha Dhabi, the property and construction company owned by International Holding Company, and Yahsat, the satellite operator owned by Mubadala Investment Company, were some of the other big companies that went public on the ADX.
Six debt instruments and an exchange-traded fund were also added to the bourse in 2021, bringing the number of publicly listed companies to 69, debt instruments to 27, private companies to 13 and exchange-traded funds to two.
For the 2022 financial year, Borouge expects to pay fixed dividends worth $325m in September and $650m in March next year.
For 2023, the company aims to pay a dividend of no less than $1.3bn, it said this month when it announced the intention to float its shares.
“We are proud to have completed this highly successful IPO and … with significant cornerstone commitments from high-quality investors a clear indicator of the strength of our investment thesis and strategic road map,” said Hazeem Al Suwaidi, chief executive of Borouge.
“We will continue to focus on driving our strategy to grow our innovative polyolefins platform and lead the petrochemical industry transition.”