OQ Gas Networks Company announced last Monday its intention to offer 49% of its total shares for subscription, i.e., approximately 2.12 billion shares with a value reaching more than OMR 212 million on the Muscat Stock Exchange, starting in the last week of this September. The shares are expected to be listed next October, after obtaining the required regulatory approvals from the Capital Market Authority, noting that this investment is compliant with the provisions of Islamic Sharia, and this is an attractive factor for a large segment of investors.

It is expected that the shares will be offered in two categories at the same time: The first category is for institutions and large investors, estimated at about 70% of the total shares offered, or approximately 1.48 billion shares, of which 30% is reserved for the main investors. The second category includes 30% of the total offered shares, which is approximately 640 million shares for individual investors.

Note that if the total applications in the second category falls below 30% of the offering, the remainder will be returned to the first category investors, as it is expected that there will be a large turnout from institutions, especially large family companies.

Bank Muscat has been appointed as Issue Manager and Joint Global Arranger with Bank of America Securities and EFG Hermes UAE Limited.

This IPO is the largest in the history of the Muscat Stock Exchange after Omantel offered 30% of its shares for IPO at an estimated value of OMR 288 million in 2005. It is the second IPO in the oil and gas sector in implementation of the exit policy of the Omani Investment Authority, which aims to achieve economic diversification and works to advance the Muscat Stock Exchange.

The company is the exclusive owner and operator with a monopoly on the basic infrastructure for natural gas distribution in the Sultanate. The company has a long-term concessionary contract with the government that reaches nearly fifty years, as the contract extends to the year 2070. The company represents the link between producers and consumers of liquefied natural gas through compression and supply stations.

The company achieved a net profit estimated at about OMR 45.6 million in 2022. The net profit amounted to about OMR 33.1 million in the first half of 2023, compared to about OMR 23.4 million in the same period last year, recording an increase of 41.5%. Total revenues amounted to about OMR 160.4 million in 2022 and recorded an increase of 16.5% at the end of the first half of 2023 compared to the same period of the previous year.

The company intends to adopt a semi-annual dividend policy to pay dividends in cash after the offering. The profits for this year will be distributed in two installments: the first installment of OMR 33 million for the first nine months in January 2024 and the second installment of OMR 11 million for the last three months in April 2024.

This IPO represents a golden opportunity for investors inside and outside the Sultanate to double their money and invest it in the strongest economic sectors in the Sultanate, specifically in OQ Gas Networks Company, where the company has a management team with high cumulative experience in delivering projects successfully, and the company maintains stable financial performance with a growing asset base. It has strong growth opportunities supported by expansion and competitive initiatives in the short and long term.