Forsa Capital expects ADES shares to soar 58% after IPO

Logo of ADES International Holding Co.

Forsa Capital said, in a note on the initial public offering (IPO) of ADES International Holding Co. on the Saudi Exchange (Tadawul), that the company is directly affected by strong global oil demand and considers policies for setting the global oil price to be a major challenge. 

ADES currently operates in six markets, namely Saudi Arabia, Kuwait, Egypt, Algeria, Tunisia, and Qatar, and will begin its operations in India in 2023, as it has already been awarded contracts there. 

The group is considered a leader in drilling operations in Saudi Arabia, in addition to being the largest operator of offshore jack-up drilling platforms in the world, the brokerage said, citing a sector report issued by Westwood. 

As for the financial statements, Forsa Capital added that growth is observed in total revenues and in net overall income margin, while the overall profit margin remains stable. 

It also stated that the company's net debt is high, as it intends to use the IPO proceeds to repay debts, thus improving its ability to obtain financing in the future. 

The IPO price is SAR 13.5 per share, with the share expected to surge by 58% based on the company's evaluation compared to its peers, most notably ADNOC Drilling and Arabian Drilling Co, according to Forsa Capital. 

According to Argaam's available data, ADES will float 338.7 million shares, or about 30% of its post-IPO capital and 39.5% of its pre-IPO capital. The price range was set between SAR 12.50 and SAR 13.50 per share.

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