Investment bankers set aside two weeks to generate interest in Saudi Arabia’s first billion-value initial public offering since the Aramco IPO. It took them only a few hours before orders started pouring in.
The Akwa Power’s $1.2 billion IPO, which is set to be priced later this month, significant interest from investors looking to gain exposure to companies seen as central to the kingdom’s plans to diversify its economy away from oil.
Initial demand for the offering reached several billion dollars, forcing advisors to limit allocations to institutional investors, according to Bloomberg, citing sources with direct knowledge of the deal.
While Aramco’s record-breaking initial public offering in 2019 allowed investors to enter the Saudi oil sector, AcwaPower provides access to the renewable energy and hydrogen projects that the Kingdom is pursuing as part of its future plans.
AqwaPower, which is half-owned by the Saudi Public Investment Fund, is expected to deliver at least 70% of renewable energy projects in the Kingdom by 2030, and it expects to achieve its net-zero emissions target ahead of the current 2050 deadline.
Naveed Naz, financial controller of the Al-Jamaz Group—a Riyadh-based family-owned company operating in the agriculture and technology sectors that participated in the bidding process—said: "The IPO is expected to see strong demand."
He added: “We expect the company to be able to present its growth plans and triple in size over the next 7 to 10 years,” according to the agency.
For his part, Thamer Al-Said, Chief Investment Officer at Mada Investment Company, said: “The subscription cap for the company will be significantly exceeded due to the nature of the offering, which is based on a capital increase rather than an exit or sale.”
The offering comes at a time when Saudi companies backed by the $430 billion Saudi Public Investment Fund are taking the lead in new offerings on the Middle East’s largest stock exchange. Aramco’s record-breaking IPO, which raised about $30 billion in 2019, paved the way for more Saudi companies to enter the capital markets.
The Kingdom also plans to dominate the $700 billion hydrogen market by building a $5 billion facility powered entirely by solar and wind energy, which will be among the world’s largest producers of green hydrogen when it opens in the massive city of Neom, scheduled for 2025, as part of its first steps toward establishing a global hydrogen market, with ACWA Power serving as a partner in the project.
