Investment bankers set aside a couple weeks to drum up interest in Saudi Arabia’s first $1 billion initial public offering since Aramco. They only needed hours before they had excess orders.
The $1.2 billion IPO by ACWA Power International, set to price later this month, is drawing high interest from investors looking for exposure to businesses seen as key to the kingdom’s plans to diversify its economy away from oil. The listing had initial demand amounting to several billion dollars and advisers are having to limit allocations to institutional investors, according to people with direct knowledge of the deal.
While Aramco’s record IPO in 2019 offered investors a slice of Saudi Arabia’s oil riches, ACWA dangles access to the renewable energy and hydrogen projects the nation sees as its future. ACWA, half-owned by Saudi wealth fund PIF, is expected to deliver at least 70% of the kingdom’s renewable projects by 2030 and expects to meet its own net-zero emissions goal before an existing target of 2050.
The IPO is expected to be “significantly oversubscribed,” said Naveed Naz, financial controller of AlJammaz Group, a Riyadh-based family-owned agriculture and technology company that participated in the bidding process. “We expect the company to be able to deliver its growth plans and triple in size within the next 7 to 10 years.”
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