Adnoc L&S share price surges on Abu Dhabi debut

Company is the sixth subsidiary of state oil company Adnoc to list on the second-biggest Arab stock market

Adnoc L&S chief executive Capt Abdulkareem Al Masabi rings the bell at the Abu Dhabi Securities Exchange as Dr Sultan Al Jaber, Adnoc managing director and group chief executive, ADX chairman Hisham Malak and bourse chief executive Abdulla Al Nuaimi look on. Victor Besa / The NationalShow less

Shares of Adnoc Logistics & Services surged as much as 58 per cent as the company made its debut on the Abu Dhabi Securities Exchange on Thursday.

The shares, which started trading on the ADX under the ticker symbol “ADNOCLS”, jumped to Dh3.17 at 12pm UAE time on Thursday.

The company had set its final offer price at Dh2.01 share, towards the higher end of its previously announced range of Dh1.99 to Dh2.01 a share, giving it a market capitalisation at the time of listing of about $4.05 billion.

Shares of the company settled about 56 per cent above the listing price at Dh3.13 at the close of trading on Thursday.

Parent company Adnoc raised about Dh2.83 billion ($769 million) from the sale of a 19 per cent stake in its maritime logistics unit. The initial public offering was 163 times oversubscribed and drew more than $125 billion in bids.

Adnoc will continue to own a majority stake of 81 per cent in the company.

This is the second Adnoc unit to go public this year and the sixth to date. Adnoc L&S is the second-biggest listing in the Middle East this year after the IPO of Adnoc Gas in March.

Adnoc Gas raised $2.5 billion from the sale of a 5 per cent stake in the company, making it the world's largest initial public offering globally at the time and the largest listing on the ADX.

“This is a truly historic moment … Adnoc’s six IPOs to-date have drawn over $385 billion of total demand, further cementing Abu Dhabi’s standing as a go-to destination for global capital,” said its group chief financial officer Khaled Al Zaabi.

“The record-setting market debut of Adnoc L&S marks the next extraordinary achievement in our ongoing value-creation journey, and we welcome our new investors to partake in our continued growth journey.”

Adnoc L&S is undertaking a global expansion programme aimed at offering a broader service to its customers while supporting and enabling the growth of Adnoc’s upstream and downstream operations.

The company has the most diversified fleet in the Middle East, owning 245 vessels and managing more than 600 vessels annually. Its fleet and its 1.5 million-square-metre integrated logistics base position it as a global maritime leader.

“As a key enabler of global energy commodities, Adnoc L&S provides critical and highly specialised services across Adnoc’s entire value chain, and is ideally positioned to continue to deliver secure and lower-carbon intensity energy to the world,” said Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S.

“In pursuing our major strategic expansion drive, underpinned by up to $5 billion in medium-term capital expenditure, Adnoc L&S will provide investors with exciting growth opportunities as we decarbonise our operations and deliver on our ambitious road map for the future.”

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.

In the first quarter of 2023, Abu Dhabi accounted for 14 per cent of all listings worldwide, 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.

“ADX continues its rapid capital market trajectory and activity,” said ADX chief executive Abdulla Alnuaimi.

“The record level of oversubscription garnered by Adnoc L&S through its IPO is a clear demonstration of the value on offer across Abu Dhabi’s core industries, sectors and market-leading entities.

“Abu Dhabi’s strong market fundamentals and macroeconomic outlook continue to bolster ADX’s robust listing pipeline, with ADX firmly positioned as a premier investment destination for international and institutional capital, as well as a thriving home for issuers.”

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 nearly Dh2.7 trillion at the close of trading on Thursday.

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.

Citigroup, First Abu Dhabi Bank, HSBC and JP Morgan Chase were joint global co-ordinators on the Adnoc L&S IPO.