September’s IPO window was not just open, it was wide open as several new IPO announcements were made and several ongoing IPOs came to a spectacular conclusion with oversubscription rates for two primary issues in the range of 15 times each. At close up, supply of $160 million worth of stock in the two issues faced demand above $2.3 billion.
Impending primary issues confirmed in September included Kuwait’s Noor Telecommunications Holding Company which is offering a 49% stake to the public at a price of 110 Kuwaiti fils per share. The IPO is expected to be launched on October 7. Not far behind, the UAE’s Al Nahda International Education Company, which operates a large number of schools in Abu Dhabi, announced that it will offer 770 million shares or 38.5% stake to the public, at a share price of AED 1.02. The IPO is expected to launch in the fourth quarter of 2007. An extension of subscription was reported from Syria, where Al Aqeelah Takaful Insurance said it lengthened the period to October 27 after achieving 50% subscription coverage by September 26.
A new IPO proposal was communicated from Qatar where a conglomerate will approach the market under the name Aamal with an IPO worth $284.5 million for 30% of its capital. The timeline is not yet confirmed but the measure will be the first to target expatriates as part of the subscriber base. Even more weighty prospects come from the Saudi market, with a lead by Saudi Aramco. The company said that an oil refining joint venture set up with Japan’s Sumitomo Chemical Co. on the western coast of the Red Sea will raise $3 billion in an IPO to finance its operations. According to media reports the IPO is expected to launch by the end of the year.
The joint firm known as Rabigh Refining & Petrochemical Co. (Petro Rabigh) had a total projected cost at $4.3 billion, but surging materials prices have pushed up the figure to $9.8 billion. The company has already raised $5.8 billion in loans from about 20 banks and the IPO, which would be the largest ever in the region, will cover the remaining costs.
According to Zawya’s IPO Monitor, three companies — two from Jordan and one from Oman — were on track with successful subscription periods between end of August and late September. Oman’s Galfar Engineering and Contracting was 14.81 times oversubscribed when it closed on September 10. Jordan Baton for Blocks and Inter Locking Tiles was 15.17 times oversubscribed when it closed on August 30.
Expected to be oversubscribed is also Jordan’s United Cables Plants Co. which launched its IPO on September 17, offering a 25% stake, worth $14.1 million, of its $56.4 million capital. Announced closure date for subscription was September 30.
Galfar Engineering was the largest IPO in Oman history
Galfar Engineering was the largest IPO in Oman’s history. It garnered immense demand from institutional buyers whose hunger for allotments upward of 10,000 shares exceeded supply almost 33 times. In the retail tranche of the offering, where prospective buyers could request up to 10,000 shares, demand was lower by a factor 30 and oversubscription amounted to only 2.3 times, according to the company.
Galfar was the demand tiger in September, with $2.27 billion on subscription records versus its $156 million offering. In late September, the company said allotments on the retail category (10,000 or less than 10,000 shares) was 43.91%, and the second category (more than 10,000 shares) 2.97%. The additional funds were to be refunded on September 25, the company said. Galfar is expected to be listed on the Muscat Securities Market around October 24.
Rights issues of importance have been furthered by two banks, Qatar National Bank and National Bank of Kuwait, both of which are appealing to their shareholders with new expansion plans. QNB wants to up its capital of currently $446 million by 48.5% through its rights and bonus shares issue. NBK is looking for a 20% increase of its present $693 million capital.
The IPO that gapped the headlines for first-day performance at listing in September was Abu Dhabi’s Deyaar Development, a real estate firm, which registered a gain of 100% during its debut on September 5 on the Dubai Financial Market. By end of trading day, Deyaar’s shares closed up at AED 1.91 ($0.52) after peaking to AED 2.02 and recorded transactions valued at AED 3.299 billion ($898.5 million) or 1.73 billion shares. This was in line with analysts expectations of a fair value estimate of AED 2.0 per share, implying an upside of 96% to the IPO plus subscription fee price of AED 1.02 per share.