NMDC Energy’s $877m IPO oversubscribed within hours

UAE’s NMDC Group said on Friday that the initial public offering (IPO) of its subsidiary, NMDC Energy, has been oversubscribed within hours of the first day of its subscription period, as investors rushed to snap up shares in what is expected to be the UAE’s biggest listing this year.

The construction and dredging services firm is offering 1.15 billion shares at an offer price of Dhs2.8 apiece. The group seeks to raise $877m through the IPO.

“Strong early investor interest in the NMDC Energy IPO sends a clear message about confidence in both the solid fundamentals and significant growth potential of the business. This IPO will support the expansion of NMDC Energy, accelerate innovation and deliver long-term value to shareholders,” said Yasser Zaghloul, group CEO of NMDC.

NMDC is offering the shares in two tranches — institutional investors and retail investors – between August 30 and September 4, with trading debut scheduled for September 11, 2024 on the Abu Dhabi Securities Exchange.

The company’s IPO drew Al Ataa Investment as a cornerstone investor, which agreed to buy 142.5 million shares, representing approximately 12.39 per cent of the offering. First, Abu Dhabi Bank is the lead manager for the sale, with Abu Dhabi Commercial Bank, WIO Bank, and Al Maryah Community Bank acting as receiving banks.

The group previously invested in the IPOs of ADNOC Gas and ADNOC L&S. The Alpha Dhabi-backed company has won contracts from ADNOC Group to work on several projects this year, such as a $200m dredging contract for a natural gas export facility.

Founded in 1973, NMDC Energy has executed more than 1,200 projects, including approximately 1,360 installed structures, 8,000 km of laid pipelines, and 2,000 km of marine cables. NMDC’s half-year net profit rose by 66 per cent to Dhs1.46bn compared to Dhs881m in the same period a year ago, while its revenue jumped 79 per cent to Dhs12.1bn.

The group’s assets in the January-June period increased by Dhs7.7bn to Dhs28.5bn compared to Dhs20.8bn for the corresponding period in 2023.

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