ABU DHABI — ADNOC Gas stocks increased their gains and capital profits to more than AED33.8 billion (US$9.2 billion) on the first day of trading after the company’s initial public offering (IPO) at the Abu Dhabi Securities Exchange (ADX).
The company’s market capital rose from AED181.9 billion to AED215.6 billion by the end of Monday’s trading session, closing at AED2.81 per share, an increase of 18.6 percent compared to the final offering price.
In the first trading day, the stock saw active trades totalling 276.2 million shares worth AED781.9 million through 8,921 executed trades.
On Monday, the listing and trading of ADNOC Gas shares began at ADX after the successful completion of the largest-ever IPO in the market and the largest in the world so far this year.
The IPO, which raised total proceeds of AED9.1 billion through the Abu Dhabi National Oil Company, ADNOC, gaining a minority stake representing some five percent of the company’s total issued capital, witnessed the strongest demand ever for an IPO in the UAE, with total demand across all segments being more than AED450 billion, exceeding the target value by around 50-fold.
Shares in ADNOC Gas, which only became operational at the start of this year, were heavily oversubscribed even after the offering was expanded from 4 to 5 percent of issued share capital in response to strong interest.
The final price was set at 2.37 dirhams ($0.65) per share, towards the top of its range, raising about $2.5 billion and implying a market capitalization of around $50 billion.
ADNOC Gas is the biggest flotation yet on the Abu Dhabi stock exchange, which opens at 9:30 am (0530 GMT).
At more than 50 times oversubscribed, it is the biggest demand ever seen for an initial public offering in the Middle East and North Africa, outstripping oil firm Saudi Aramco’s world-record $29.4 billion listing just over three years ago.
The rapidly organized IPO from ADNOC, one of the world’s biggest oil firms, follows last year’s scramble for alternative gas resources after Russia’s invasion of Ukraine, and comes as countries search for cleaner fuels to mitigate global warming.
Energy consultant Roudi Baroudi, who heads the Qatar-based Energy and Environment Holding firm, said he expected brisk demand when the shares start trading.
“There is every reason to expect that the massive oversubscription we saw will carry over into strong interest when the shares are floated publicly,” Baroudi told AFP.
‘Transition fuel’
Abu Dhabi National Oil Company, the United Arab Emirates’ key revenue-earner, retains a 90 percent stake in the subsidiary formed from its former gas processing, LNG and industrial gas units.
Gas is being touted as cleaner than other fossil fuels as countries around the world strive to reduce their emissions.
Baroudi said Liquified Natural Gas (LNG) was “the most important transition fuel in the move away from hydrocarbons”.
In 2021, the UAE produced 57 billion cubic metres (bcm) of natural gas, or about 1.4 percent of global output, according to the BP Statistical Review of World Energy.
That same year, the Emirates exported 8.8 bcm of LNG, 1.7 percent of world LNG exports, the Statistical Review said.
“As global efforts to battle climate change gain pace, the role of natural gas in general… is widely expected to grow,” Baroudi said.
“ADNOC enjoys a solid reputation, so it was to be expected that the ADNOC Gas IPO would attract strong interest.”
ADNOC Gas could be the first in a series of share offerings in Abu Dhabi this year.
At least eight companies are expected to follow in fields ranging from technology to asset management and regenerative medicine, Bloomberg said, citing Sameh Al Qubaisi, director general of economic affairs at Abu Dhabi’s Department of Economic Development.