The “ADNOC case” received a huge response from the company’s subscription investors, even after raising the subscription level to 4 to 5 percent of the company’s shares in response to strong demand.
After setting the closing share price at 2.37 dirhams ($0.645), the offering was worth about $2.5 billion, and the company’s market value was about $50 billion.
ADNOC Gas’s IPO in 2023 will be the largest initial public offering in the world so far and the largest to be listed on the Abu Dhabi Stock Exchange.
With oversubscription over fifty times the target value, demand for ADNOC’s public offering has become the largest in the Middle East and North Africa, surpassing the world record of $29.4 billion set by Saudi Aramco three years ago.
The first public offering, organized by ADNOC, came quickly in the wake of the rush to find alternative gas resources after the Russian invasion of Ukraine, along with countries’ search for cleaner energy sources to address the climate change crisis.
Energy expert Rudi Baroudi, who heads Qatar-based Energy and Environment Holdings, expects demand to pick up when shares begin trading.
“There is every reason to expect that the massive oversubscription we’ve seen when shares go public will continue to generate strong interest,” he told AFP.
ADNOC, the biggest earner for the UAE treasury, retained a 90 percent stake in its new subsidiary, which was created from its previous unit to process liquefied natural gas.
Gas is described as environmentally cleaner than other fossil fuels, and many countries around the world are trying to reduce their emissions.
Barudi considered LNG to be “the most important intermediate fuel when phasing out hydrocarbons”.
In 2021, the UAE produced about 57 billion cubic meters of natural gas, or 1.4 percent of global production, according to BP figures.
In the same year, the United Arab Emirates exported about 8.8 billion cubic meters of liquefied natural gas, representing 1.7 percent of the volume of global exports, according to the British International Energy Company.
“With the pace of global efforts to combat climate change, the share of natural gas in general (…) is widely expected to grow,” Barudi said.
He added, “ADNOC has a good reputation, so the public offering in ADNOC gas was expected to attract strong interest.”
The ADNOC Gas IPO could be the start of another series of IPOs in Abu Dhabi this year.
At least eight companies in the fields of technology, asset management and renewable medicine are expected to follow in ADNOC’s footsteps, quoted Sameh Al Qubaisi, director general of economic affairs at the Department of Economic Development in Abu Dhabi.
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