Photo used for illustrative purpose.

State oil giant Abu Dhabi National Oil Company (Adnoc) on Friday set the final price for its initial public offering, valuing the company at about $50 billion (equivalent to approximately Dhs182 billion) after drawing record demand. It will become Abu Dhabi's largest listed company.

Adnoc Gas' share price was set at Dhs2.37 ($0.65) per share, near the top end of the price range that was set at Dhs2.25 to Dhs2.43 a share, Adnoc said in a statement.

Proceeds from the IPO came to roughly $2.5 billion (equivalent to approximately Dhs9.1b) out of an order book that topped $124 billion, Adnoc said. That exceeded demand for Saudi oil giant Aramco's 2019 IPO, which raised $25.6 billion and remains the world's largest.

The Middle East bucked global trends last year to raise some $21.9 billion through IPOs, according to Dealogic. That was more than half the total for the wider Europe, Middle East and Africa region.

Adnoc last week said it would increase the stake offered to investors to 5% from 4% due to strong demand for the deal, Abu Dhabi's largest IPO. Adnoc Gas is expected to begin trading on March 13.

The bookbuilding process generated orders of over $124 billion (equivalent to over Dhs450 billion) in aggregate from (i) qualified institutional investors in a number of countries, including the UAE (the Qualified Investor Offering); and (ii) UAE retail investors, including employees of Adnoc group companies residing in the UAE and UAE national retirees of Adnoc group companies residing in the UAE (together, the "UAE Retail Offering”), implying an over-subscription level above 50 times in aggregate.

Commenting on the historic bookbuild for a MENA IPO, Khaled Al Zaabi, Group CFO of Adnoc, commented, "Adnoc is delighted with the unprecedented demand for Adnoc Gas shares from the UAE retail investors as well as the local and global institutional investor community — and we are extremely proud that this IPO witnessed record demand for a UAE and MENA region IPO, with Adnoc Gas being the largest-ever market debut in Abu Dhabi and the largest IPO globally to date this year. 

"This truly historic listing is the fifth company Adnoc has successfully brought to market in as many years, with the unparalleled level of investor interest reinforcing both the attractiveness of Adnoc’s world-class and low-carbon intensity energy asset base, and cementing Abu Dhabi’s leading position as a go-to destination of global capital.

"As the next landmark milestone in our ongoing value creation program, Adnoc Gas is a highly attractive value proposition, and underpins Adnoc’s key role as a catalyst and critical enabler of domestic economic growth and the diversification of the UAE financial marketplace. We welcome our broadest investor base yet to join Adnoc as we continue to deliver sustainable growth for Abu Dhabi, the UAE, and our shareholders.”

"The strong demand for the IPO reflects a number of factors, including the important role that gas will play globally as a cleaner transition fuel and the strong demand outlook from Europe," Monica Malik, chief economist at UAE bank ADCB, told AFP.

WAM / Agencies