Arabian Drilling poised to raise $712m from Tadawul IPO

The Al Khobar-based company will have market value of $2.4bn at listing

one of Arabian Drilling's onshore rig. The company said its IPO book-building generated orders worth 162bn riyals from institutional investors. Photo: Arabian Drilling

Arabian Drilling Company, a Saudi Arabian oilfield services company, is set to raise 2.67 billion Saudi riyals ($712 million) from a 30 per cent stake sale its initial public offering, as it looks to grow operations across the Gulf.

The company, based in Al Khobar, set the final offer price at 100 riyals per share at the top end of the range announced in September, valuing the company at 8.9bn riyals ($2.4bn) at listing, it said in a statement.

The company is selling 26,700,000 shares in the public float and the offering attracted 162bn riyals from institutional investors in the book-building process, indicating strong investor appetite.

Saudi Arabian citizens, foreign residents in the kingdom and GCC citizens will be able to subscribe to the retail offering between October 18 and 19.

The company's expected trading date on the kingdom’s Tadawul stock exchange will be announced in local newspapers and on the bourse's website once regulatory approvals are secured.

“Global investors have come to recognise the significant and integral role we play ― and will continue to play ― in the oil and gas value chain in the kingdom,” said Ghassan Mirdad, chief executive of Arabian Drilling.

“The investment case is robust and the demand for our shares has ensured a successful institutional fundraising phase.”

Arabian Drilling, which has a rig count of 45 and serves four key customers in the kingdom, including Saudi Aramco, sees high demand for its services amid elevated commodity price environment and concerns around energy security as a result of the current macro-political and economic landscape.

“Looking ahead, we also have plans to grow and expand further into the GCC, where we are also witnessing strong demand increases,” Mr Mirdad said.

Arabian Drilling is the latest company to sell shares on the regional equity markets this year.

While capital markets in the US and Europe have slumped amid inflation woes and fears of a looming recession, equity markets in the GCC and the broader Mena region have had a flurry of IPOs.

Arabian Drilling chief executive Ghassan Mirdad. Photo: Arabian Drilling

Earlier this month, Saudi-based Power and Water Utility Company for Jubail and Yanbu, better known as Marafiq, said it is pushing ahead with plans to list its shares on the Tadawul.

The Mena region recorded a 500 per cent annual increase in the number of listings in the first six months of this year, with 24 IPOs raising $13.5bn, according to an EY report on Mena IPOs. In the second quarter of 2022, nine IPOs raised about $9bn.

Globally, 630 IPOs raised $95.4bn in proceeds during the first half, which is a significant annual drop of 46 per cent in the number of deals and 58 per cent slump in the proceeds raised, the report said.