ADNOC Logistics & Services’ stock made an immediate 50 percent gain, breaching the Dh3 mark in the opening minutes of listing on ADX. The world’s most successful IPO of the year – on over-subscriptions – to date had sold its shares at Dh2.01.
This is the sixth ADNOC entity to list on ADX, and the previous one – ADNOC Gas – had risen by 25 percent on its opening day before settling in at around 18 percent.
ADNOC L&S comes in after being over-subscribed 163 times and pulling in $125 billion in the process.
“ADNOC’s six IPOs to-date have drawn over $385 billion of total demand, further cementing Abu Dhabi’s standing as a go-to destination for global capital,” said Khaled Al Zaabi, Group Chief Financial Officer of ADNOC. “The record-setting market debut of ADNOC L&S marks the next extraordinary achievement in our ongoing value creation journey, and we welcome our new investors to partake in our continued growth journey.”
ADNOC L&S intends to pay a fixed dividend of $195 million for the second quarter and the second-half of 2023 (equivalent to an annualized $260 million). Thereafter, it expects to increase the annual dividend per share by at least 5 percent per annum.
At the end of its first 30 minutes as a public listed company, ADNOC L&S’ stock was at Dh2.96, on volumes of 84.7 million.
The ADX wider index is down 7.9 percent for the year-to-date, and which the ADNOC L&S listing and its pull will rectify to a degree. Investors on ADX had been hedging their bets around a series of mini-headwinds blowing through the global economy.
Strong domestic base
As has been the case with ADNOC Gas, the logistics and services division drew from a strong well of UAE resident investor buy-in for the IPO. This has been a feature of UAE IPOs this year, including that for Al Ansari Financial Services on DFM.
“Building on a strong start to 2023 with 14 percent of global IPO activity in Q1, ADX continues its rapid capital market trajectory and activity,” said Abdulla Salem Alnuaimi, CEO of ADX.
“The record level of oversubscription garnered by ADNOC L&S through its IPO is a clear demonstration of the value on offer across Abu Dhabi’s core industries, sectors, and market-leading entities. Abu Dhabi’s strong market fundamentals and macroeconomic outlook continues to bolster ADX’s robust listing pipeline, with ADX firmly positioned as a premier investment destination for international and institutional capital as well as a thriving home for issuers.”
More IPOs to follow
At the start of the year, there had been talk about ADX seeing about 10 listings in 2023.
ADNOC L&S offered 19 percent through the IPO. Based on the final offer price of Dh2.01 per share, ADNOC L&S’ market cap at the time of listing was around Dh14.9 billion.
“The ADNOC Logistics’ stock price was always going to be a significant value proposition for investors,” said an analyst. “It continues the parent company’s tradition of offering competitive valuations for investors to participate.
“ADNOC Logistics was offered at upwards of 25 per cent discount. While short-term market movements are the stuff of headlines, the long-term fundamentals continue to attest growing domestic – and international – interest for the ADNOC group and the domestic capital market.”