MCDC IPO oversubscribed 19 times

Muscat - 

The initial public offering (IPO) of Muscat City Desalination Co (MCDC) received huge demand from both retail and institutional investors and oversubscribed nearly 19 times.

The Capital Market Authority (CMA) on Tuesday approved the allocation ratio of the shares of MCDC taking into consideration the biggest proportion for retail investors.

The IPO attracted a total subscription amount of more than RO122mn against the offer size of RO6.5mn, according to a press statement issued by the CMA. The shares of MCDC are expected to be listed on the Muscat Securities Market on January 2, 2018.

As per the allocation structure approved by the CMA, small investors will receive minimum 1,000 shares for each small investor plus 3.1 per cent of the remaining offered shares in Category I, while institutional investors will receive only 4.14 per cent of offered shares in Category II.

Mohammed Said al Abri, vice president - capital market sector at the CMA, said, “The volume of subscription was 19 times the offered shares. The CMA considered the situation to give opportunity to small investors to invest in the MSM and to infuse new blood in the market and avoid concentration of holdings. This approach would help to widen the participation in the capital market and boost trading in shares.”

He said the huge subscription to the IPO is an evidence of investors’ appetite and desire to avail opportunities and take part in the holdings of productive companies. “Such results are a positive indicator of investors confidence in the securities market. It indicates the availability of liquidity which should be used to stimulate the national economy by investing in productive projects.”

Abri said the CMA encourages investors to focus on long-term investment to achieve larger benefits especially when the issuer is employing huge funds in investment activities which have impact on the national economy and realise feasible returns.

MCDC had offered 35 per cent of the founders’ shares in its IPO at a price of 116bz per share. The subscription for the IPO had opened on November 19 and closed on December 18.

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