Oman has seen growing initial public offering (IPO) activity in recent years, spurred in part by regulatory requirements for foreign-backed electricity companies to conduct share offerings. While 2015 got off to a slower start than the previous year, recent regulatory changes should help to further boost the IPO pipeline in coming years and in turn to improve liquidity levels on the Muscat Securities Market’s (MSM) equity exchange. These changes include a 2014 law obliging insurance companies to conduct public offerings by 2017, as well as moves by the authorities to relax listings requirements.


IPO activity has been growing in recent years, albeit from a low base, with the number of public offerings rising from none in 2009 to one each in 2010 and 2011, and two per year in 2012 and 2013. Activity doubled again in 2014, with four IPOs taking place, although the total value of finance raised on the sultanate’s capital market during the year – including other transactions such as bond issues, rights issues and private placements – fell from OR1.17bn ($3bn) in 2013 to OR907m ($2.3bn). The listed companies were Al Maha Ceramics, the IPO of which had a subscription value of OR7.94m ($20.6m); Al Sawadi Power with a subscription value of OR32.5m ($84.1m); Al Batinah Power (OR30.2m, $78.2m); and Takaful Oman Insurance (OR10.2m, $26.4m).

Despite the comparatively large number of offerings, all of the transactions were oversubscribed, with Al Maha leading the pack at a rate of 20 times. The two power company offerings were spurred by a regulatory requirement for foreign-backed electricity firms to list on the MSM within five years of being established. Two other utility companies, Al Sharqiya Desalination and Dhofar-based electricity and water firm Sembcorp Salalah, listed in 2013.

Power Listing

IPO activity appears to have slowed in 2015. As of September, the year to date had seen one, namely the public offering of a 35% stake in another electricity producer, Phoenix Power Company, in May. However, the value of the transaction, at OR56.3m ($145.8m), was almost twice as large as the biggest IPO in 2014 and represented the largest share float on the MSM since Bank Nizwa’s share offering – which raised OR61.2m ($158.4m) – in 2012. Again, demand for the offering was high, with shares 20 times oversubscribed. Phoenix Power – which owns the largest power plant in Oman, the Sur Independent Power Project – was listed on the MSM in late June.


However, further major IPOs are in the pipeline. In January 2015 state-owned Oman Oil Refineries and Petroleum Industries Company (ORPIC) said that it intended to conduct a share offering, though the firm said this was unlikely to occur before 2017 due to current market conditions.

Another company with plans for an IPO is Jindal Shaheed Iron and Steel. Its owner, Indian conglomerate Jindal Steel, announced plans in November 2014 to list the Sohar-based firm in order to fund an expansion plan aimed at doubling its capacity, though in June 2015 the company’s CEO, N A Ansari, said the firm was awaiting a recovery in steel prices before going ahead with the transaction.

In May 2014 oil and gas logistics firm TruckOman also announced plans for an IPO, which it initially said would take place later the same year. While this did not occur, Mohamed Musa Al Yousef, the chairman of the company, reiterated the plans in February 2015, saying that the company had appointed Oman Arab Bank to manage the transaction and that the floatation would take place in the near future.

Insurance Listings

Recent regulatory changes in the insurance sector have further bolstered the IPO pipeline. In 2014 the authorities approved a new insurance law, in the form of a royal decree (No. 39/2014), which among other measures requires local insurance firms to convert to public joint-stock company status and list a portion of their equity on the MSM. Existing companies have until the end of 2017 to meet the requirement, while newly established firms are obliged to list immediately.

As of September 2015 only four insurance companies were listed on the exchange, meaning that there should be seven insurance IPOs in the coming years. Some of these should take place well before the deadline as well as exceed the minimum equity stake requirements. Al Anwar Holding, the majority owner of Falcon Insurance, in June 2015 announced plans for an IPO of a 51% equity stake in the firm and, speaking in August, A R Srinivasan, CEO of Falcon Insurance, told OBG that the company would go public soon.

Other Markets

Industry figures say other sectors will also see listings. For example, Lo’ai Badie Bataineh, head of investment management and chief investment officer of Oman Arab Bank, told OBG that the firm was currently working on deals in the leasing, oil and gas and mining sectors, in addition to insurance IPOs, and that the recent trend of utility company IPOs is likely to continue. “More firms in the segment are likely to list in coming years as they need to fund expansion projects,” he told OBG, adding that he believed that the wider overall IPO pipeline would be healthy in the coming two years.

Pradeep Asrani, managing director of Gulf Baader Capital Markets, said that the Omani state could also become a source of activity over the longer term if budgetary pressures persist. “The government has stakes in many businesses in Oman and if the oil price remains low it may seek to boost its revenues by divesting some of these, which could lead to more secondary market activity,” he told OBG.

Family Firms

Ahmed Salah Al Marhoon, the director-general of the MSM, in March 2015 said that a local family owned firm was also likely to float in 2015, though he did not name the company in question. Such firms are major players in the Omani private sector but have so far been reluctant to list on the exchange. At the Arab IPO Summit in September, Marhoon said that equity floats could help family businesses deal with challenges posed by a changing business environment by providing incentives for better management and governance. They can also be a useful tool in succession planning. However, industry figures said that that the coming years are unlikely to see many public offerings in the segment. “The government has been encouraging family owned business houses to list their companies but so far we haven’t seen a positive response, barring a few exceptions,” Asrani told OBG. Rashad Ali Abdullah Al Musafir, acting CEO of Bank Sohar, said that businesses in the segment do not see the benefits of going public. “Bank funding is available, and regulations are more restrictive for publicly listed firms.”

Regulatory Encouragement

In order to encourage more IPOs, the authorities are taking measures to relax listing requirements. The sultanate’s Commercial Companies Law currently contains a requirement that firms listing on the MSM float a minimum equity stake of 40%. A draft revised version of the law has reduced this to 25%, though as of August it had yet to be published. In the meantime the Council of Ministers is able to exempt firms from the requirement, and TruckOman in February said it had received such an exemption for its planned IPO.


The fact that all recent IPOs have been oversubscribed, often heavily so, underscores strong demand for investment opportunities in the sultanate. “There is plenty of money available to be invested, and the response to IPOs is phenomenal,” Asrani said. “What is required is for business houses and good quality companies to shed their diffidence and raise capital through IPOs.” While partly a reflection of high levels of liquidity in the economy and banking sector in particular, this also reflects the strong initial performance of most recently floated stocks. “Demand for IPOs is usually high, as investors have come to expect an immediate return,” Srinivasan told OBG.