Huge oversubscription seen in Phoenix Power initial public offering

09/06/2015 08:47 AST

Heavy oversubscription is seen in Phoenix Power Company's initial public offering (IPO), which closed its one-month subscription on Monday.

The shares have been priced at 110 baisas per share, with the total offer size of OMR56.3 million. Shares will be allotted to investors on June 18, refund will start on June 21 and listing on June 22.

Market sources expect the financial institutions must have subscribed to the tune of 15 times, similar to Al Suwaidi and Al Batinah Power.

Apart from expectation of stable dividend payout, ample liquidity with institutions also helped heavy subscription of the share offer. Brokerage houses expect the share to list on the Muscat bourse anywhere between 130 baisas and 144 baisas.



Dividend yield

Phoenix Power Company projected an attractive 7.3 per cent dividend yield for the next five years, which is the highest among listed power companies in Oman. This compares to an average dividend yield of 5.9 per cent for other power companies listed on the Muscat Securities Market (MSM).

Research analysts highlighted the strategic importance of the largest power plant to the country's power sector, stable business profile, attractive dividend yields and proven track record of the strong group of committed founding shareholders as key factors underpinning the positive investment case for the IPO.

As many as 65 per cent is reserved for the first category, who apply for shares between 1,000 and 600,000, while the second category is institutions and high-net worth individuals who apply for shares between 600,100 and 51,191,000.

As the largest power plant in Oman, the contracted plant's power capacity of 2,000 megawatt represents 27.8 per cent of the main interconnected system.

Times of Oman