By: Mahmoud Gamal
Abu Dhabi – Mubasher: ADNOC Distribution’s initial public offering (IPO) is expected to be oversubscribed by more than 100%, analysts told Mubasher.
Abu Dhabi National Oil Company (ADNOC) on Sunday launched the IPO to sell about 10% to 20% of its distribution unit’s total shares.
The Abu Dhabi-based company has set an indicative price ranging between AED 2.35 and AED 2.95.
Alluring price
Investors have shown great interest in ADNOC Distribution’s IPO at the first day because of the alluring indicative price range, which will attract large segments of investors, general manager of Al Ansari Financial Services Eyad Al Bariqi said.
The company’s market share of fuel distribution in the UAE and its major role in the country’s oil market attract investors to the IPO, Al Bariqi highlighted.
He indicated that the good financials achieved by ADNOC at the end of 2016, as profits surpassed AED 1.7 billion, are one of the factors luring investors to the offering.
He forecast the IPO to be oversubscribed by more than 100% when the firm sets the final price on 8 December.
The new offering is likely to boost liquidity in the Abu Dhabi Securities Exchange (ADX), Al Bariqi added.
Better than Emaar Development
Moreover, financial analyst at Menacorp Financial Services Essam Kassabia said that ADNOC Distribution’s IPO is one of the best IPOs in 2017.
ADNOC’s IPO is much better than Emaar Development’s IPO in terms of price, Kassabia indicated.
He explained that ADNOC Distribution has set an indicative price ranging between AED 2.35 and AED 2.95, which is more attractive than Emaar Development’s that reached AED 8.
Company profile
ADNOC Distribution has 360 retail service stations across the UAE, in addition to liquid propane gas (LPG) and natural gas for vehicles (NGV) distributors.
The company’s capital amounts to AED 1 billion, distributed over AED 12.5 billion at a par value of AED 0.08 per share.
Translated by: Mai Ezz El-Din
