DUBAI (Businesshala) – Shares in Saudi Arabia’s renewable energy utility ACWA Power International jumped 30% in its market share for the first time since its $1.2 billion IPO on Monday, the kingdom’s highest since Saudi Aramco’s massive public offering in 2019. Big.
Shares in ACWA, which is partly owned by Saudi sovereign wealth fund PIF, rose to 72.80 Saudi riyals ($19.41) in early trading, well above their initial public offering price of 56 riyals per share.
ACWA builds, operates and invests in renewable energy plants and becomes the only renewable company listed in Saudi Arabia. It placed its IPO at the top of the price range last month, successfully raising $1.2 billion from investors, the largest but dwarfing Saudi Aramco’s $29.4 billion IPO.
Mohamed Ali Yassin, chief strategy officer at Al Dhabi Capital, said the increase in ACWA’s share price saw a trend in IPOs in Saudi Arabia, which are being oversubscribed 50 to 200 times.
“The appetite to participate in the IPO and book building process is huge. This, Yasin said, pushes for larger volumes to be subscribed, resulting in lower allocations, meaning people need to come back to the market to build their positions.
ACWA sold 11.1% of its existing shares in the IPO, reducing the Public Investment Fund’s (PIF) stake to 44%.
Saudi Arabia’s stock market is up more than 33% this year, helped by an economic recovery driven by higher oil prices and last year’s COVID-19-linked contraction.
Several listings are expected on Riyadh’s exchange over the next 12 months, including those on the stock exchange Tadawul and the specialty chemicals business of Saudi Basic Industries Corp.
Saudi Arabia’s capital markets authority said in September that about 45 companies were awaiting listing approval.
In addition to the initial public offering, ACWA has said that it will allocate approximately 4.14 million shares, representing 0.57% of the company, to certain employees of the company and its subsidiaries as part of its employee IPO grant plan.
($1 = 3.7503 riyals)