Adnoc Gas raises IPO size to about $2.5 billion on high demand

(Image: ADNOC)

Abu Dhabi National Oil Co (ADNOC) will increase the stake in its gas business being offered in an initial public offering to 5% from 4%, the state oil giant said on Monday.

ADNOC made the decision to increase the stake in the ADNOC Gas offering "based on significant investor demand across all tranches," it said in a statement.

The decision was also made to create a "supportive trading environment for the company’s stock post-admission," it added.

As a result, the retail tranche has been increased from 10% to 12% of the offering.

ADNOC also raised the tranche reserved for employees and United Arab Emirates national retirees of ADNOC Group companies residing in the country to 4% from 2%.

The remaining 84% of the offering has been reserved for institutional investors.

ADNOC is selling roughly 3.84 billion shares in its gas business, equivalent to about 5% of its issued share capital.

The price range for ADNOC Gas was set last week at 2.25 dirhams to 2.43 dirham (($0.6126-$0.6617) per share, giving the company an equity valuation of $47 billion to $50.8 billion.

At the top of the range, ADNOC would raise roughly $2.54 billion from the sale, according to Reuters calculations.

ADNOC Gas' IPO was covered within hours of the company opening its books on Thursday, according to a message sent to investors and seen by Reuters, in a sign that demand from equity investors for Gulf listings remains healthy.

The final offer price is expected to be announced on March 3, while listing and trading is expected to commence on March 13.

ADNOC is sharpening its focus on the gas market as Europe seeks to replace all Russian energy imports as early as mid-2024 after gradual supply cuts since Western sanctions were imposed on Moscow over its invasion of Ukraine.

Companies from the Middle East raised some $21.9 billion through IPOs in 2022, accounting for more than half the total from the wider EMEA region including Europe and Africa, Dealogic data showed.