The successful completion of the Nawras initial public offering (IPO) was a small victory where there could have been a large one.
The Omani telecommunications operator raised 182 million rials by selling 260 million shares. It was also the country's first share offering done through a book-building process and its biggest IPO since 2005.
Given the dismal state of the capital markets in the Gulf for the past couple of years, all of those achievements are laudable.
But the shares were priced at 702 baisas a share, near the bottom of the expected range, amid lukewarm demand from retail investors who took up less than 40 per cent of shares.
Nawras, which is controlled by Qatar Telecom (Qtel), had reserved as much as 70 per cent of the offer for retail investors, with the rest set aside for institutional investors. This month, Nawras extended the IPO period by a week due to the sluggish response on the retail front.
"Nawras raised only 70m Omani rials from retail investors and 112m Omani rials came from institutional investors," a source familiar with the IPO told Reuters.
"Clearly, the retail investors did not have much appetite for the IPO and it was left to institutional investors to come to the rescue."
Nawras will list the shares on the Muscat bourse starting on November 1.
Nawras broke the monopoly of the state-controlled Omantel in 2006. It aimed to raise up to US$608m if the shares had reach-ed the top price of 902 baisas.
It seems clear Nawras did the right thing by postponing its plans for an IPO in February.
But such a qualified success may not be the catalyst some market watchers were expecting to fire up the IPO market in the Gulf.
Qtel retains a 55 per cent ownership stake in Nawras and Omani pension funds hold another 5 per cent. The rest is publicly floated on the Omani stock market.
* with Reuters