Nawras IPO rakes in Dh1.73bn

Nawras, the Omani telecommunications operator that is part-owned by Qatar Telecom, has raised 182 million rials in the largest public listing in the country since 2005.

Image Nawras has rapidly gained ground in Oman, gaining a 45 per cent share of the market since its launch in March 2005.

Nawras, the Omani telecommunications operator that is part-owned by Qatar Telecom (Qtel), has raised 182 million rials (Dh1.73 billion) in the largest public listing in the country since 2005.

The operator announced the price of its initial public offering (IPO) would be 702 baisas or 0.702 rials a share, placing the market capitalisation of the company at 456m rials.

"It's well placed in the market, being the second operator [in Oman]," said Chandresh Bhatt, a telecoms analyst at Gulf Finance House. "It has the potential, I think."

Nawras will begin trading on November 1 on the Muscat Securities Market under the ticker "nwrs".

But its executives may be disappointed that the stock was priced at the lower range of their estimates. The company's IPO was priced through the book-build method, in which the price of a stock is determined by market demand rather than the company's board.

Last month, when Nawras officials generated investor interest in the IPO, the listing was expected to raise as much as 234m rials.

People close to the deal said the fund-raising method had paid off and could serve as a model for other Gulf listings.

"If you hadn't had the book-build offer, I think you would have had a vastly under-priced deal," one source said.

"The fact that we were able to price the transaction successfully will give issuers confidence to try their own IPOs."

The listing had previously been planned for February as part of the conditions mandated by the Omani government when it licensed the creation of Nawras but it was postponed because of the difficult economic climate.

"Looking at the market conditions, I think they postponed rightly at that time … this was the right time for the company to IPO," said Mr Bhatt.

A research note from Rasmala Investment Bank last month said the float could lift prospects for other stocks in the Omani market.

"Given that this is only the second IPO in Oman in the last couple of years, there is a good chance that it could generate some short-term momentum among investors," the note said.

The funds raised by the listing will be used to expand the mobile network of Nawras in Oman and assist in the roll-out of the operator's fixed-line network across the country.

The operator was recently awarded a 25-year licence to provide internet and television services across the country under certain coverage conditions that include ensuring 81 per cent of the country's population has access to its offerings by next year.

Qtel retains a 55 per cent ownership stake in Nawras, another 5 per cent is held by a number of Omani pension funds and the rest is publicly floated on the market.

Since its commercial launch in March 2005, Nawras has rapidly gained ground on the incumbent Omani mobile operator, Omantel. It now has a 45 per cent share of the mobile market and 1.97 million subscribers.