Adnoc L&S IPO: Company increases number of shares on offer for retail investors

Retail portion of initial public offering has been raised to more than 1.4 billion shares from 1.1 billion, equal to 19% of total shares on offer

Workers on board an Adnoc Logistics & Services vessel. The company's shares are expected to begin trading on the ADX on June 1. Photo: Adnoc

Adnoc Logistics & Services, an Adnoc subsidiary, has increased the number of shares allocated to retail investors in its initial public offering due to “significant investor demand”.

The retail portion of the IPO has been raised to more than 1.4 billion shares from 1.1 billion, equal to 19 per cent of the total shares on offer and up from the previously announced 15 per cent, the company said on Monday.

Assuming all of the shares in the offering are sold, Adnoc will raise between Dh2.80 billion ($762 million) and Dh2.83 billion ($770 million) from the sale of its logistics unit, it said.

Adnoc announced plans earlier this month to list its logistics and shipping unit on the Abu Dhabi Securities Exchange, marking the second IPO of one of its businesses this year, following the listing of Adnoc Gas in March.

The price range of the offering has been set between Dh1.99 and Dh2.01 a share, implying a market capitalisation of Dh14.7 billion ($4.01 billion) to Dh14.9 billion ($4.05 billion) at listing, it said.

The final offer price will be determined through a book-building process and is expected to be announced on May 25, the company said.

Meanwhile, the subscription period for the UAE retail offering and the professional investor offering remains unchanged and will close on May 23 and May 24, respectively.

The shares of Adnoc Logistics are expected to begin trading on the bourse on June 1.

“We have witnessed exceptional demand across all tranches, with significant interest across the local, regional and global investment community in this unique opportunity, reflecting Adnoc L&S’ strong growth prospects as a critical enabler of Abu Dhabi and the UAE’s supply of energy to the world while driving the decarbonisation of the UAE maritime sector,” said Khaled Al Zaabi, group chief financial officer of Adnoc.

The Adnoc L&S listing will “further bolstering the local financial equity market”, he added.

The size of the first tranche has been increased from 9 per cent to 12 per cent of the offering, with 3 per cent of the offering reserved for the third tranche and the remaining 85 per cent reserved for investors in the professional investor offering, Adnoc said.

The Adnoc L&S IPO comes amid a flurry of listings in the Gulf region and Dubai, which plans to bolster the size of its capital markets.

Middle East IPOs raised more than $23 billion in 2022, 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.

Abu Dhabi accounted for 14 per cent of all listings worldwide in the first quarter of 2023, an indication of the strength of its capital markets amid a challenging global IPO market, consultancy EY said in its Global IPO Trends report in March.

The UAE capital attracted $3 billion worth of listings proceeds in the three months ended March, placing it third worldwide.

“Adnoc Logistics & Services IPO … is set to be the second-largest market debut so far this year in the Middle East region,” said Mr Al Zaabi.

Adnoc L&S, which provides logistics and maritime solutions, aims to have a growth capital expenditure of $4 billion to $5 billion in the medium term to expand the scope of services provided to companies in the Adnoc group.

Citigroup Global Markets Limited, First Abu Dhabi Bank, HSBC Bank Middle East and JP Morgan have been appointed as joint global co-ordinators and bookrunners, while Moelis & Co is acting as independent financial adviser on the IPO.