Adnoc Gas share price surges on Abu Dhabi debut

Company is the fifth Adnoc subsidiary to list on the second-biggest Arab stock market

The sale of a 5 per cent stake in Adnoc Gas raised about $2.5 billion. Photo: ADX
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The shares of Adnoc Gas surged more than 25 per cent as the company made its debut on the Abu Dhabi Securities Exchange on Monday.

The shares, which started trading on the ADX under the ticker symbol “ADNOCGAS”, jumped to Dh2.97 at the start of trading.

Shares of the company settled about 19 per cent above the listing price at Dh2.37 at the close of trading on Monday.

Adnoc Gas had set its final offer price at Dh2.37, towards the higher end of its previously announced range of Dh2.25 to Dh2.43 a share.

Parent company Adnoc raised about Dh9.1 billion ($2.5 billion) from the sale of a 5 per cent stake in the gas business, marking the world's largest initial public offering so far this year and the largest listing on the ADX.

The listing surpassed that of Borouge, which went public in June 2022 and raised $2 billion.

Adnoc Gas is the fifth company Adnoc has taken public. The parent company will continue to own 90 per cent of the company after the IPO.

“As Adnoc Gas moves into life as a listed company, we remain focused on our clear growth strategy, underpinned by upstream capacity expansion, which will allow us to process and deliver increased volumes to customers, further enhancement of our product mix and ensuring we deliver for our growing number of international customers as demand for gas continues to increase,” said Ahmed Alebri, acting chief executive of Adnoc Gas.

Adnoc Gas has access to 95 per cent of the UAE's natural gas reserves, estimated to be the seventh largest globally. It also supplies more than 60 per cent of the UAE's gas needs.

The company can tap into 10 billion standard cubic feet per day of gas-processing capacity. It will operate eight gas-processing sites and a pipeline network of more than 3,250km.

Adnoc Gas expects to pay a dividend of more than $1.62 billion in the fourth quarter of 2023 in respect of the first half of this fiscal year that ends in December.

It expects to pay a further dividend of more than $1.62 billion in the second quarter of 2024 in respect of the second half of this year.

The company expects to grow its annual target dividend amount of $3.25 billion by 5 per cent each year on a dividend per share basis over the 2024 to 2027 period.

With high inflation, uncertainty surrounding the world economy, rising interest rates and the war in Ukraine, Gulf capital markets stood out from their global peers in 2022, benefitting from higher oil prices, a liquidity boost and stronger investor confidence.

Middle East IPOs raised more than $23 billion in 2022 from 48 listings, compared with $7.52 billion from 20 offerings in the previous year.

That was the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.

The UAE had 12 listings that raised $11 billion last year, apart from the joint Abu Dhabi-Riyadh IPO of Mena food franchisee Americana, which reaped $1.8 billion in late 2022.

“With the UAE and Emirate positioned firmly on the global investment map, ADX continues to attract record levels of interest and demand from institutional and international investors,” said ADX chairman Hisham Malak.

“Looking ahead, ADX continues to be buoyed by a strong pipeline of listings that will serve to strengthen and broaden its offering, enhance its central role in supporting the UAE’s economic growth and ability to attract institutional capital and foreign direct investment.”

The GCC will continue to attract IPOs in 2023, despite the challenges facing the global economy, with 27 to 39 companies possibly floating their shares, according to Kuwait's Kamco Invest.

The Abu Dhabi Securities Exchange was the best-performing market in the GCC for a second consecutive year in 2022, gaining more than 20 per cent.

The market capitalisation of the ADX stood at more than Dh2.7 trillion at the close of trading on Friday.

Updated: March 13, 2023, 1:28 PM