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Abu Dhabi's Adnoc Logistics & Services attracted orders worth $125 billion for its $769 million initial public offering (IPO). Abu Dhabi National Oil Co. sold a 19% stake in its maritime logistics unit, valuing the company at $4.05 billion. The IPO demand is the highest globally this year, with an oversubscription level of 163 times.
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Adnoc has been selling stakes in its units since 2017 to diversify the economy and reduce reliance on fossil fuels. Adnoc L&S plans to pay a $260 million annual cash dividend in 2023, with at least 5% annual increase. The company aims for $4 billion to $5 billion in capital expenditure. Al Seer Marine Supplies, National Marine Dredging, Alpha Oryx, and Abu Dhabi Pension Fund will subscribe for 23.4% of the offering as cornerstone investors. Adnoc L&S shares will start trading on June 1.
Why it matters
Middle Eastern IPOs have seen increased sizes and strong investor demand, standing out amid a global slump in listings. High oil prices in the region have contributed to this trend. Adnoc's gas business IPO raised $2.5 billion, exceeding its initial size and attracting $124 billion in orders. The region's IPOs offer high dividend yields, appealing to investors in a rising interest rate environment.
