Oman’s OMIFCO targets $2.7B valuation in IPO as Hormuz disruption highlights strategic export advantage

Oman India Fertiliser Company (OMIFCO) has launched a $678 million initial public offering on the Muscat Stock Exchange, targeting a valuation of up to $2.7 billion as Oman leverages the strongest global nitrogen market in nearly four years.

The offering comprises 1.672 billion existing shares, representing a 25% stake in the company. Subscription opened on June 16 and will close on June 25, with trading expected to begin under the ticker symbol OMIF on or around July 8.

The IPO is well-timed for fertilizer producers. Global urea and ammonia prices surged after the Strait of Hormuz closed in late February, tightening supplies and raising nitrogen benchmarks to multi-year highs. Although prices have started to decline following the regional ceasefire, OMIFCO entered the market while demand, especially from India, remained strong.

Strategic location shielded exports from Hormuz disruption

Unlike most fertilizer producers in the Persian Gulf, OMIFCO benefited from its location on Oman’s southeastern coast.

The company’s production complex in Sur is outside the Strait of Hormuz, enabling uninterrupted exports while producers in Qatar, Saudi Arabia, the United Arab Emirates, and Kuwait faced significant logistical disruptions. As hundreds of vessels waited for safe passage inside the Gulf, OMIFCO was largely insulated from these delays.

In 2025, the company produced 1.35 million tonnes of ammonia and 2.07 million tonnes of urea, operating above nameplate capacity for both products despite challenging geopolitical conditions.

According to Argus Media, OMIFCO is Oman’s largest urea producer and ranks as the joint third-largest producer in the Middle East Gulf, excluding Iran, behind QatarEnergy and SABIC.

The business remains overwhelmingly dependent on nitrogen products. Urea generated 92.8% of total revenue during 2025 and increased to 95.4% during the first quarter of 2026. Annual revenue reached RO308.9 million (approximately $802 million) in 2025.

India remains the cornerstone of OMIFCO’s business

India remains central to OMIFCO’s export strategy and is expected to be its largest customer for the foreseeable future.

Under a revised marketing arrangement that became effective in February 2026, OQ Trading will supply one million tonnes of urea annually under India’s government procurement program. The trading company also plans to market an additional 500,000 tonnes each year through commercial sales into the Indian market.

The IPO prospectus shows that India accounted for 71% of exported urea volumes and 61% of ammonia exports between 2023 and 2025.

With approximately 98.3% of its urea production exported, OMIFCO is highly exposed to international fertilizer prices and global trade flows. Strong Indian purchasing activity has become a key earnings driver.

OMIFCO is jointly owned by OQ, Indian Farmers Fertiliser Cooperative (IFFCO), and Krishak Bharati Cooperative (KRIBHCO). Following the IPO, the three shareholders will collectively retain a 75% ownership stake.

Long-term gas contract provides stability but limits upside

A key focus of the IPO prospectus is OMIFCO’s long-term natural gas agreement.

The company receives feedstock from Integrated Gas Company (IGC) under a contract extending through July 15, 2035. The agreement provides 58.765 million MMBtu annually at a base price of $5.25 per MMBtu, with prices increasing by 3% annually on a compounded basis. For 2026, the contracted gas price rises to approximately $5.41 per MMBtu.

The contract includes a profit-sharing mechanism tied to international urea prices. This mechanism was triggered in the third quarter of 2025 and the first quarter of 2026, redirecting part of the additional earnings from higher fertilizer prices to Oman’s state decarbonization programs instead of being fully retained by shareholders.

While the agreement ensures long-term feedstock security, it limits earnings potential during periods of exceptionally high nitrogen prices.

Expansion plans hinge on future gas allocation

OMIFCO is considering a major capacity expansion that would significantly increase its production footprint.

The company has completed a feasibility study for a third production train capable of adding approximately 3,500 tonnes per day of ammonia capacity and 6,212 tonnes per day of urea capacity.

The project carries an estimated capital cost of approximately $2.9 billion and would require an additional 2.7 million metric standard cubic metres of natural gas per day.

Feedstock availability remains the main uncertainty. OMIFCO has requested additional gas allocation from IGC but has not received confirmation from the Omani government. No final investment decision has been made.

For investors, future gas allocation is one of the company’s most significant long-term growth risks.

Dividend outlook and market timing

OMIFCO expects to distribute a total FY2026 dividend of approximately $185 million, payable in two equal installments during September 2026 and April 2027. The company also plans to pay a special dividend of $25 million alongside the first distribution.

The IPO prospectus received approval from Oman’s Financial Services Authority on June 11. Bank Muscat and Société Générale are serving as joint global coordinators for the transaction.

Although nitrogen prices have begun to ease after the Middle East ceasefire, OMIFCO’s subscription period opened while fertilizer markets remained well above historical averages. This timing allows investors to assess the company during one of the most profitable pricing environments since 2022, even as markets adjust to reopened shipping routes.

Source: Muscat Daily