(MENAFN- Muscat Daily) Muscat- Analysts at Oman's leading brokerage houses have strongly recommended investors to subscribe for the initial public offering (IPO) of Dhofar Generating Co (DGC).
Leading brokerage firms in their research reports have valued DGC shares significantly above the reduced IPO price, indicating upside potential between 21.8 per cent to 30.7 per cent.
The DGC IPO has been extended till August 16 with a reduced price of 225bz per share (including issue expenses), translating into a higher dividend yield of eight per cent for the first five years.
'We value DGC at 294bz per share with a long-term perspective and recommend investors to subscribe to the offer in view of the upside potential of 30.7 per cent from the revised issue price of 225bz in the next nine to twelve months, along with the expected listing gains and the attractive dividend yield of eight per cent at the offer price', Al Maha Financial Services said in its research report.
Anticipating an upside potential of 27 per cent for the IPO, U-Capital said, 'We reiterate our positive stance on the IPO of DGC. At the new offer price, price-to-book multiple is 1.0x and it offers a dividend yield of eight per cent which is way above the average yield of the power and water sector and the MSM'.
Gulf Baader Capital Markets (GBCM) said it maintains a long-term fair value of DGC at 274bz per share, offering an upside of 21.8 per cent from the revised offer price.
'Historically, utility sector IPOs saw strong listing gains at the MSM and had adjusted for 6-6.5 per cent dividend yield immediately post listing. With DGC offering a dividend yield of eight per cent on the revised IPO pricing, we recommend both long and short term investors to subscribe for the issuance', GBCM said.
In order to encourage enhanced retail participation, active trading in the shares of DGC on listing and long-term commitment to Oman, DGC recently decided to offer more value to investors participating in its IPO by revising the price to 225bz per offer share on the entire offering of 88,896,000 shares.
In a press release Naif al Awaaid, CEO of DGC said, 'Our decision to offer more value to investors in Oman has been received well by the investor community. Analyst reports further reinforce the investment opportunity, especially with the new reduced price that offers significantly more value to investors. We urge all investor groups to take advantage of the reduced price and the extended subscription period. DGC is Dhofar's largest power company and is an essential part of the growth and prosperity in the region, and the IPO is an unique opportunity to be part of our remarkable success.'
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