Saudi Aramco Base Oil, a refining unit of the state-owned oil producer, slumped in its trading debut following an initial public offering that raised $1.32 billion, bucking the trend for strong debuts in the Gulf region amid the gloomy outlook for the global economy.
Luberef, as the refiner is known, dropped as much as 6.6% in Riyadh to 92.5 riyals ($24.61), valuing the company at 15.9 billion riyals.
Saudi private equity firm Jadwa Investment sold 50 million shares — a 30% stake — in the offering, for 99 riyals per share, the top of the pricing range. Oil giant Saudi Aramco is holding onto its 70% share.
The Gulf has been one of the world’s most active IPO markets in 2022, raising more than $20 billion this year. That would have been an annual record if it weren’t for 2019 when Aramco had its $29.4 billion listing. However, while investor demand for new listings has held up, the after-market performance has been weaker as regional equity indexes have come off earlier highs, tracking a decline in oil.
Luberef operates two production facilities on Saudi Arabia’s west coast, producing various base oils and byproducts including asphalt, marine heavy fuel oil and naphtha.
SNB Capital, Morgan Stanley, HSBC Holdings Plc and Citigroup Inc. managed the IPO.