Chemicals company Borouge soars in debut after staging Abu Dhabi’s biggest IPO

BOROUGE, a chemicals joint venture between the United Arab Emirates’ main oil company and Borealis, surged in its trading debut after raising US$2 billion in Abu Dhabi’s biggest listing.

The shares rose as much as 20 per cent to 2.95 dirhams on Friday (Jun 3), valuing Borouge at just over 88 billion dirhams (S$32.9 billion). The shares were priced at 2.45 dirhams each.

The IPO attracted US$83 billion of orders in the latest sign of strong demand for listings in the region. It drew interest from the likes of BlackRock and Fidelity, Bloomberg reported last week. Seven cornerstone investors agreed to subscribe for US$570 million worth of shares, including Gautam Adani, Asia’s richest man.

Listings on Gulf stock exchanges are on track for their best-ever first half as high oil prices and broad economic reforms draw investors to the region. IPOs in the Middle East have fetched US$11.4 billion in the first 5 months of the year, already eclipsing the amount raised in any other first half, data compiled by Bloomberg show.

In addition to Borouge, Abu Dhabi National Oil has sold stakes in 2 units over the last year - Adnoc Drilling and fertiliser firm Fertiglobe. Shares in the drilling unit have risen 41 per cent since listing, while Fertiglobe’s stock has doubled.

Abu Dhabi-based Borouge makes speciality plastics for manufacturing and consumer goods. It has said it will pay US$975 million in dividend for the financial year 2022, rising to at least US$1.3 billion for 2023.

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At the offer price, the projected dividend for next year implies a yield of 6.5 per cent. That’s above the average of 2.7 per cent for listed speciality chemical firms, according to data compiled by Bloomberg Intelligence.

Citigroup, First Abu Dhabi Bank, HSBC and Morgan Stanley were the joint global coordinators for the IPO. BLOOMBERG