Abraj Energy IPO sees strong demand, oversubscribed more than eight times

Muscat: The initial public offering (IPO) of Oman’s Abraj Energy Services, the oil and gas drilling business of state energy company OQ, has been oversubscribed 8.7 times following strong demand among domestic and international investors.

The final price was at 249 baisas a share, the top end of an offer range that started at 242 baisas and closed on March 2 with OQ offering 377.40 million shares. Trading on Muscat Stock Exchange is due to start on March 14.

Abraj had aimed to raise up to OMR93.97 million through the IPO of its 49 per cent share capital.

The total demand for IPO shares topped OMR790 million, making it 870 per cent oversubscribed and recording the biggest demand for an IPO in Oman in recent years, according to the data provided by Abraj on Twitter.

“We are proud to record the largest initial public offering in Oman’s stock market, with the subscription volume in the company’s shares amounting to more than OMR790 million. We sincerely thank our success partners – new investors – for their confidence in Abraj Energy Services,” the company said.

Anchor investors subscribed for 40 percent of Abraj Energy’s shares at the maximum price. Saudi Omani Investment Co., a unit of Saudi Arabia’s Public Investment Fund, will own 20 percent, while Royal Court Affairs and SLB, the world’s largest oil services company, will each take 10 percent.

Earlier on Monday, the Capital Market Authority (CMA) approved the allocation of Abraj shares to the subscribers. As much as 35 per cent of the total offered shares have been allocated to the second category investors (retail investors).

The IPO collected OMR246 million from retail (second category) investors against the offered size of OMR29.6 million in this category, oversubscribing more than eight times. Around 40,000 individual retail investors participated in the second category subscription.

On the other hand, the institutional (first category) subscription – which has been allocated at 65 percent of the total offer size – was oversubscribed by 21.6 times, attracting very strong demand from domestic and international investors.

Abraj had collected OMR507 million from institutional subscription except for anchor investors. Apart from two anchor investors, as many as 132 local, regional and international institutions participated in the IPO.

In a statement, the CMA said that the allocation of Abraj shares was approved based on distributing the minimum limit to the small shareholders category at 4,500 shares and 0.1121 per cent of the remaining shares for each subscriber. For the institutional investors, the subscribers have been allocated 4.62 percent of their respective subscriptions.