Omani OQ Base Industries shares fall in weak IPO debut

Oman’s OQ Base Industries saw a 10 per cent drop in its shares on the Muscat stock exchange following its $489 million IPO, the latest in a series of lackluster Middle Eastern listings.

The methanol and liquefied petroleum gas firm priced shares at 111 baisas ($0.29) each, at the top of its range, but fell below the offer price. OQ SAOC, the state energy company, sold a 49 per cent stake in the company, implying a valuation of $1 billion.

This follows other weak trading debuts in the region, including Talabat’s $2 billion IPO, which ended 7 per cent lower, and Lulu Retail’s flat performance after its $1.7 billion listing in Abu Dhabi. OQ’s $2 billion IPO for its exploration unit in October also saw a muted start.

Oman’s privatisation push continues, with about 30 assets up for sale, and upcoming IPOs include logistics firm Asyad and Oman Electricity Transmission Co. OQ is considering more listings in the coming years.

OQ Base Industries attracted 387 million rials in demand from institutional and retail investors, with anchor investors such as Falcon Investments LLC, Gulf Investment Corp., and others committing to 30 per cent of the offer. The firm plans to pay $85 million in dividends for 2024, with increases of at least 5 per cent in 2025 and 2026.

It reported 2023 revenue of $510 million and an adjusted EBITDA margin of 43.1 per cent. Morgan Stanley, Bank Dhofar, and Bank Muscat were joint global coordinators for the offering.

Attribution: Bloomberg

Subediting: M. S. Salama