Arabian Drilling targets up to $2.4 billion valuation in Saudi IPO

Saudi Arabia-based oil and gas drilling contractor Arabian Drilling Company has set the price range of its initial public offering at SAR90-100 ($24-26) per share.

Arabian Drilling’s IPO advisor, HSBC Saudi Arabia, said the offer size of the company, which is planning to float 30% of its shares in the open market, is expected to be between SAR2.4 billion and SAR2.67 billion. This would imply a market capitalization of SAR8.0-8.9 billion ($2.1 billion to $2.4 billion).

Of the 30% shares it is selling, Arabian Drilling will issue fresh shares of up to 10.11% of the current share capital, while existing shares will make up for the remaining 19.89%.

Among its current shareholders, the Industrialization & Energy Services Co., or TAQA, and Services Pétroliers Schlumberger S.A are selling their stakes.

The Arabian Drilling IPO comes even as the Saudi Capital Markets Authority (CMA) has approved three fresh IPOs as the oil-rich kingdom sees a surge in listing activity.

Saudi Arabia, the largest Gulf economy, raised more than $3.8 billion in as many as 13 IPOs through the first quarter of 2022, making up for 87% of the region’s IPO proceeds.

The Saudi stock market regulator on Monday approved the listing of Power and Water Utility Co. for Jubail and Yanbu to sell 29.24% of share capital.

A third company, Saudi Top for Trading, has been permitted to offload 22% of its shares in the open market.

In addition, the CMA also approved the listing of Molan Steel, which has been allowed to offload 20.2% of its shares on the parallel Nomu exchange.