Adnoc Drilling on Sunday began trading on the Abu Dhabi stock market after its $1.1 billion initial public offering (IPO), the largest ever on the exchange.
The newly-listed unit of Abu Dhabi oil giant Adnoc surged 30 per cent to Dh3.05 in early trading but later closed at Dh2.95 per share, up 28.26 per cent, with 242.33 million shares traded on the exchange on debut.
Adnoc Drilling, whose share offering attracted more than $34 billion in demand, is expected to be among the 10 largest companies on the Abu Dhabi Securities Exchange, based on a market capitalisation at listing of about $10 billion.
“This important milestone will bolster the expansion and diversification of Abu Dhabi’s equity capital markets and further the development of the UAE’s economy and private sector,” Adnoc said in a statement to Khaleej Times.
Adnoc Drilling shares were offered at a price of Dh2.30 per share on September 13, 2021 following the issue of an intention to float announcement on September 6, 2021, with allocations and confirmation of the pricing on September 27, 2021.
Adnoc increased the size of the IPO to 11 per cent of share capital because of oversubscription. It had previously targeted selling a minimum stake of 7.5 per cent.
A value creation
Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc managing director and Group CEO, said Adnoc Drilling’s record-setting listing is another key milestone in the company’s value creation and maximisation strategy.
“Today’s listing will enable domestic and international investors alike to benefit from the growth trajectory of a company that sits at the very heart of Adnoc’s ambitious growth plans,” he said.
In addition, the minister said this highly successful IPO will further strengthen and broaden Abu Dhabi’s vibrant equity capital markets, while driving the UAE’s economic growth, diversification and attracting foreign direct investment.
“The significant demand for this offering, emphasized by the considerable oversubscription, reflects the investment community’s high confidence in Adnoc Drilling and the attractiveness of Adnoc and the UAE as a compelling investment destination,” he said.
The overwhelming investor demand for Adnoc Drilling shares underlines the company’s compelling investment and growth story as the largest drilling company in the Middle East by rig fleet size. It is also the sole provider of drilling rig hire services and certain associated rig-related services to Adnoc Group.
A milestone event
Mohammed Ali Al Shorafa Al Hammadi, chairman of ADX, said the listing of Adnoc Drilling is a milestone event for the Abu Dhabi Securities Exchange.
“It will enhance our capital markets and provide a unique opportunity for investors accessing an important and flourishing segment of the emirate’s economy,” he said.
Abdulrahman Abdullah Al Seiari, CEO of Adnoc Drilling, said the success of “our initial public offering and today’s listing” is a huge vote of confidence in Adnoc Drilling.
“Adnoc Drilling is on an upward growth trajectory with a unique contractual relationship with Adnoc and plans to continue to support Adnoc as it delivers on its 2030 growth target to increase oil production capacity to five million barrels per day as well as the UAE’s goal to be gas self-sufficient, he said.
Saeed Hamad Al Dhaheri, chief executive officer of ADX said the Adnoc Drilling listing is testament to the success the ADX One strategy has had in rapidly delivering a diverse range of products and services.
“The Adnoc Drilling listing will serve to further draw in new investors and issuers, and bolstering the exchange’s market capitalisation, which exceeded Dh1 trillion for the first time in 2021,” he said.
During the year, he said ADX’s benchmark index also reached a record high, surpassing the 7800-point mark and becoming one of the best-performing indexes in the world this year.
“We will continue to roll out new products and services to deepen market liquidity and access to finance, which has been greatly enhanced since the introduction of Q Market Makers in October last year,” he said.
Adnoc will continue to own an 84 per cent majority stake in the unit, while Baker Hughes will retain its five per cent shareholding. Helmerich and Payne will hold one per cent through its IPO cornerstone investment.
The sale is the second public flotation of a company owned by the Abu Dhabi oil major after the 2017 listing of Adnoc Distribution, the largest operator of petrol stations and convenience stores in the UAE.
Reliance International Ltd, the new subsidiary, is yet to commence operations, the parent company said in an exchange filing, adding it had invested $1 million in the new business
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