Oman's OQ Gas Networks soars 14% on trading debut after $750m IPO

The company plans to hand out its first dividend of $85.7m in January, followed by another $28.6m in April

Muscat Security Market building, the only stock exchange in Muscat the capital of the Sultanate of Oman on Wednesday, Oct. 12, 2011. (Silvia Razgova/The National)
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Oman’s OQ Gas Networks, the pipeline business of state oil company OQ, soared nearly 14 per cent in its first day of trading, after it raised 288 million Omani rials ($750 million) in an initial public offering that was the sultanate's biggest.

Shares of the company, which trades under the symbol “OQGN” on the Muscat Stock Exchange, opened at 159 baisas on Tuesday, up 13.5 per cent from its offer price of 140 baisas. It has slightly pulled back to 154 baisas as of 12.15pm.

OQGN also expects to hand out its first dividend distribution of 33 million Omani rials ($85.7 million) in January covering the first nine months of 2023, the company said in a statement on Tuesday.

This will be followed by another 11 million rial ($28.6 million) payout in April, covering the last three months of 2023, it said.

“The company’s ability to pay dividends is dependent on a number of factors, including the availability of distributable reserves, its capital expenditure plans and other cash requirements in future periods, as well as the necessary approvals,” it said.

OQGN's IPO came amid a listings boom in the GCC, driven by government incentives, foreign investor interest and diversification efforts.

IPO activity in the wider Middle East and North Africa region continued to gather momentum in the second quarter of 2023, as the volume of IPOs on regional bourses surged 44 per cent annually amid robust economic growth, recent data from global consultancy EY showed.

On October 12, OQGN raised the record amount in its IPO after pricing it at the top of the range, drawing “overwhelming demand” from local, regional and international investors, the company said at the time.

The total gross demand for the offering amounted to more than 4 billion rials, implying an oversubscription level of 14 times in aggregate, including anchor investors.

The anchor investors included Saudi Omani Investment Company, a wholly owned entity of the kingdom's Public Investment Fund, Qatar Investment Authority subsidiary Falcon Investments and Brussels-based Fluxys International, who have each secured a 10 per cent share of the issue volume.

The company has a market capitalisation of 606 million rials, making it the third largest company on the MSX by market capitalisation.

OQGN, which holds a monopoly over critical gas transportation infrastructure in Oman, recorded no gas supply interruptions in 2022, it said.

The network involves a system of pipelines, metering facilities, compressor stations, gas supply stations and block-valve stations.

Last year, the company transported 39.4 billion cubic metres of gas from six producers to about 130 consumers through 4,031km of pipelines, supported by three compressor stations and 25 supply stations.

Updated: October 24, 2023, 9:03 AM