Asyad Shipping Prices IPO at Top Guidance, Local Investors Lead Demand

Asyad Shipping successfully priced its IPO at OR0.123, raising OR128.1 million and valuing the company at OR640.7 million. The offering is primarily driven by local investors and presents a dividend yield of 9%, potentially increasing to 12.5%. The IPO aims to regain international investor confidence amid cautious market behavior following past equity performances.

Oman’s Asyad Shipping successfully priced its Initial Public Offering (IPO) at the top of the guidance range, valuing the company at OR640.7 million. The offering, which raised OR128.1 million (approximately US$332.8 million) through a 20% free-float of 1.04 billion shares, was primarily driven by local investors. Some institutions participated, albeit at smaller sizes compared to previous engagements due to pricing concerns.

The IPO pricing indicates a dividend yield of 9%, which could reach 12.5% with an additional payment for the 2024 financial year. Despite being set at a discount compared to recent spin-offs by OQ, the overall cautious sentiment following weaker performances in the Middle Eastern stocks market influenced investor behavior.

According to a banker involved, international accounts anticipated a double-digit dividend yield; however, the initial yield was insufficient to assure long-term interest from these investors. One banker reflected on the challenges, noting that the market’s perception had been affected by mixed performances from past offerings.

Learning outcomes from last year’s Omani listings included managing the allocation processes better. Many Omani deals did not perform as expected, causing earlier strategies to be reconsidered. In response to investor concerns, Asyad appointed Ubhar Capital as the stabilisation manager, marking a regulatory first for Oman.

Investor interest was notably local, with additional interest from hedge funds and specific emerging market specialists, extending requests beyond the GCC region. Management executed roadshows in several Omani governorates, concluding at the Muscat Stock Exchange.

The allocation strategy indicates that institutions will receive 45% of shares, while 25% will go to retail investors, with key anchors such as Falcon Investments and Mars Development and Investment taking up 30%. Trading of Asyad shares is anticipated to commence on March 12, with expectations for success stories to enhance market confidence in Oman.

In conclusion, Asyad Shipping’s IPO reflects a nuanced balance of local and international investor dynamics, influenced by previous market performances. With strategic adjustments in allocations and stabilisation efforts, the offering aims to foster interest while ensuring adequate returns for investors. The anticipated launch of shares heralds an important milestone in enhancing investor sentiment within the Omani market.

Original Source: www.zawya.com