Phase one of MPC IPO oversubscribed 5.6 times
IPO priced at 316bz/share; Phase 2 for retail investors starts today
Musandam Power Company (MPC), a subsidiary of Oman Oil and Orpic Group, on Tuesday announced the successful closing of the phase 1 of its initial public offering (IPO) for listing on the Muscat Securities Market (MSM).
Based on the price discovery process completed through book-building by large and institutional investors, the allotment price for shares has been determined at 316bz per share, according to a press statement issued by MPC.
In the first phase, the IPO received a strong response with an oversubscription of 5.6 times of phase 1 offer shares. Investors included a cross-section of Oman’s leading sovereign funds, pension funds, banks, asset management companies, corporates as well as high net-worth individuals. A high number of bids came at the top end of the price range of 260bz to 325bz per offer share, which resulted in a cut-off price at 316bz per share.
The phase 2 of the IPO, where shares would be offered to retail investors at the price of 316bz per share, would be opened for subscription from today until November 21.
Ahmed Tufail al Rahman, chairman of MPC, said, “Wide and strong participation in the phase 1 of the IPO is in line with our expectations and endorses the response we received during our investor meetings. Retail investors now have the advantage to see the strong response from the large investors and can now apply to become part of the success story of Musandam Power and earn average dividend yield of 8.8 per cent per annum and get the first dividend in December.”
The IPO investors are expected to receive the first dividend of 27.6bz in the month of December 2019. Further, as per the prospectus, MPC is expected to declare next dividend of 13.8bz per share in March 2020. With these dividends expected to be declared in December 2019 and March 2020, the IPO investors are expected to get a combined dividend of 41.4bz per share within first six months of buying the shares in the IPO.
The phase 2 offer to retail investors will see the introduction of e-IPO aimed at providing investors with the convenience to apply from their homes or offices using the mobile banking or internet banking channels of collection agents.
Under the new e-IPO process, there will be no printed application forms at the branches of the collection agents as was the case for previous IPOs in Oman.
The MPC shares are expected to be listed on the Muscat Securities Market by the first week of December, post completion of settlement and refund formalities.