By: Mahmoud Gamal
Abu Dhabi – Mubasher: Abu Dhabi National Oil Company (ADNOC) will sell about 10% to 20% of ADNOC Distribution’s total shares in an initial public offering (IPO) on Sunday.
The IPO is forecast to attract a large segment of subscribers in light of the alluring nominal value set by ADNOC, analysts told Mubasher.
The Abu Dhabi-based company will offer 1.25 billion to 2.5 billion shares of its fuel-station business at a price ranging between AED 2.35 and AED 2.95.
Boosting liquidity
ADNOC’s offering of its distribution unit is one of the most important IPOs in the UAE markets, particularly the Abu Dhabi Securities Exchange (ADX), board member of the UAE National Advisory Board and the Chartered Institute for Securities and Investments (CISI) in the UK Wadah Al-Taha said.
The IPO is likely to lure investment portfolios and be oversubscribed more than once, Al-Taha highlighted.
The sale will start from 26 November 2017 until 6 December 2017 for individual investors, while it will begin on Monday, 7 December for institutions.
Al-Taha indicated that the Emirati oil company’s operational situation and diversified investments will boost liquidity for this IPO.
Financial factors
ADNOC accounts for 67% of fuel business in the UAE, Al Taha noted, adding that it operates 360 fuel stations across the country.
Oil prices of ADNOC’s fuel stations are compatible with the global prices, excluding fuel subsidies, which will guarantee the company’s profitability, he added.
Huge opportunity
Moreover, a member of the African Economic Council Mona Mostafa forecast the IPO to be a huge opportunity to lure further foreign investments amid the rebound of global oil prices.
ADNOC’s subscription will contribute to re-evaluating the ADX through diversifying sectors, Mostafa indicated.
The new IPO will make investors regain their confidence in the UAE markets that have the ability to absorb huge IPOs, she added.
ADNOC’s offering will positively reflect trades on the ADX, anticipating new trades from the new subscriptions, she pointed out.
Translated by: Mai Ezz El-Din
