Omani Abraj Energy Services IPO Oversubscribed 8.7 Times

Oman’s largest oilfield services provider Abraj Energy Services, en route to listing on the Muscat Stock Exchange on March 14, said its initial public offering (IPO) has been oversubscribed by 8.7 times after receiving strong demand from local, regional and international investors. Abraj, which aimed to raise up to RO93.97 million (US$244.06 million) through the initial public offering of its 49 % share capital, received overwhelming response to its IPO from both retail as well as institutional investors. Total demand for IPO shares topped RO790mn, making it 870 % 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 RO790 million (US$2.05 billion). We sincerely thank our success partners – new investors – for their confidence in Abraj Energy Services,’ the company said.

Through the largest IPO in Oman market since 2010, Abraj’s parent OQ offered 377.4mn shares in a price range of 242bz (~63 cents)-249bz (~65 cents) for public subscription which was closed on March 2. Abraj has set the final price at 249bz (~65 cents) per share, which is at the top of the offer price range given at the launch of the IPO. Abraj Energy Services is expected to start trading on the Muscat Stock Exchange on March 14. The Capital Market Authority (CMA) on Monday approved the allocation of Abraj shares to the subscribers. As much as 35 % of the total offered shares have been allocated to the second category investors (retail investors). The IPO collected RO246 million (US$638.91 million) from second category (retail) investors against the offered size of RO29.6 million (US$69.86 million) for this category, oversubscribing more than eight times. Around 40,000 individual retail investors participated in the second category subscription.

On the other hand, the first category (institutional) subscription – which has been allocated at 65 % of the total offer size – was oversubscribed by 21.6 times, attracting very strong demand from local, regional and international investors. Abraj collected RO507 million (US$1.32 billion) 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. Earlier OQ brought in Saudi Arabia’s sovereign wealth fund and global energy services giant Schlumberger as anchor investors for the Abraj IPO. In aggregate, the anchor investors committed RO37.58 million (US$97.60 million) to the IPO, representing 40 % of the offer size.

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 % of the remaining shares for each subscriber. For the first category (institutional investors), the subscribers have been allocated 4.62 % of their respective subscriptions. As per the data released by Abraj, around 54 % of the total institutional subscription was subscribed by local institutional investors while remaining 46 % was taken by regional and international investors. Abraj recently announced that it will add 11 new drilling rigs to its fleet during the next five years as part of its regional expansion plans. The company has also signed a strategic partnership deal with Saudi Arabian Chevron and Kuwait Gulf Oil Company in the field of drilling and oil extraction to expand its regional presence.