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Shares of Oman’s OQ Base Industries (OQBI) fell 3.6% on its debut trade on the Muscat Stock Exchange (MSX) on Sunday, the latest in a series of poorly traded starts for GCC IPOs.
Shares of the sultanate’s methanol, ammonia and LPG producer opened at 100 baisa ($0.26) per share on the first day of trading, nearly 10% lower than the offer price of 111 baisa, at the top of the range, before settling at 107 baisa at close.
“More than 65 million OQBI shares were traded yesterday, making it the most active stock on the MSX in terms of volume,” said Neetika Gupta – Vice President and Head of Research, Ubhar Capital, Oman, adding the total turnover reached OMR 6.82 million, citing MSX data.
“The initial selling pressure appears to be from retail investors. The performance was disappointing at the open but eventually with support from institutional investors, the price recovered to some extent to close the day at OMR 0.107, compared to the listing price of OMR 0.110 (-3.6%),” she added.
OQBI’s 188 million Omani rial ($488 million) offering comprised a total of 1.69 billion shares, representing 49% of its total issued share capital, with parent company, Oman’s state oil group OQ SAOC retaining the remaining 51%.
The offering was oversubscribed by 2.1 times, achieving an aggregate demand of more than OMR 387 million from local, regional and international investors across anchors.
Falcon Investments, a subsidiary of Qatar’s sovereign wealth fund, the Qatar Investment Authority, Kuwait’s Gulf Investment Corporation, the Saudi Omani Investment Company and the Social Protection Fund of Oman were named anchor investors earlier with each committed to subscribe to 7.5% of the offering, or up to OMR 56 million, aggregating to 30% of the offer, at top of the range.
The company expects to pay a dividend of OMR 32.7 million for the fiscal year 2024, for the first nine months in January 2025 and the remaining three months in April 2025.
OQBI operates three advanced plants with a combined nameplate production capacity of 1,816 ktpa, located in the Salalah Freezone. A brownfield expansion project is also in the pipeline to increase methanol plant capacity by 50%.
GCC IPOs
The OQBI performance follows a string of bumpy starts for several GCC-based IPOs, with the most recent being Talabat Holding Plc $2 billion IPO which saw shares in the food delivery platform plunge nearly 7.5% on the first day of trade on the Dubai Financial Market (DFM) last week.
Talabat’s performance follows on from the Lulu Retail IPO that saw its shares close flat after an $1.72 billion IPO on Abu Dhabi Securities Exchange.
Meanwhile, in October, Oman’s OQ exploration and production unit also had a muted debut, dropping 8.2% in its first day of trading on the MSX from the IPO price of OMR 0.39.
Despite the uneven start, experts believe Oman is still poised to see an increase in the capital raised in the exchanges across core markets with a robust IPO pipeline.
“Oman is going to bring decent stories, some of them will be of a scale which is worthy of what you see in the UAE and Saudi i.e. $500 million, $700 million and will bring few more diversity into the regional exchanges,” Samer Deghaili, Co-Head of Investment Banking - Middle East, North Africa and Türkiye, HSBC Bank Middle East Limited, told Zawya earlier.
Listings in the pipeline include Asyad Group, Oman’s national logistics company, which intends to float its subsidiary, Asyad Shipping, by 2025 according to a Reuters report.
In February, Bloomberg also reported Oman’s wealth fund had tapped Lazard Inc as an advisor for the planned IPO of the state-backed Oman Electricity Transmission Co (OETC), citing sources familiar with the matter.
(Reporting by Bindu Rai, editing by Brinda Darasha)
