Aradel Holdings, an integrated energy business founded by Nigerian multimillionaire Ladi Jadesimi, has had its market value decrease by N845.5 billion ($517 million) during the previous week, lowering its valuation below $1.7 billion from above $2.1 billion.
The slump followed the group’s historic offering on the Nigerian Exchange (NGX) just eight days ago, which initially boosted its market value to N3.05 trillion ($1.9 billion) after listing 4.34 billion shares at N702.69 ($0.43) each.
However, investor mood has soured, causing the group’s share price to fall below its offering price as market players dump shares, leading to Aradel’s rapid value decline.
Aradel’s early days on the NGX witnessed significant progress. Within two days of its debut, the group’s share price increased by 16.7 percent, from N702.69 ($0.43) on October 14, 2024, to N820 ($0.5) at the close of trade on October 15, 2024. This rise temporarily increased the market value to N3.56 trillion ($2.17 billion), indicating strong investor interest.
However, recent selling pressure has reversed these advances. Aradel’s stock price had dropped 23.7 percent to N625.4 ($0.386) as of October 22, 2024. The fall took off N845.5 billion ($517 million) in value over the last week, bringing the market capitalization to N2.72 trillion ($1.66 billion) at the time of reporting.
Nigeria has rejected Shell’s offer to sell its onshore oil assets to a consortium led by Aradel, ND Western, and Waltersmith. The government’s decision has increased uncertainty, contributing to adverse sentiment toward Aradel’s shares.
Aradel was founded in 1992 by the late Godwin Aret Adams and has since grown from Nigeria’s first integrated oil and gas investment enterprise to a fully integrated energy group. Its portfolio includes stakes in several oil and gas areas, spanning the upstream, midstream, and downstream sectors.
Aradel’s move to the NGX comes after years of trading on the NASD OTC Securities Exchange, where it had its public debut on August 1, 2013. Aradel, which had established a reputation for liquidity and honest price discovery, stopped trading on the NASD on October 11, 2024.
Despite recent share price declines, Aradel remains on significant market indices such as the NGX Oil and Gas Index and the NGX 30 Index, which monitors the exchange’s 30 most valued businesses. Its debut on the NGX broadens prospects for Nigerian investors, which aligns with Aradel’s goal of facilitating greater engagement in the energy sector.
Under Ladi Jadesimi, the founder and executive chairman of the Ladol Group of Companies, Aradel posted strong financial achievements for the first half of 2024. The group’s revenue increased by 260 percent to N268.3 billion ($168.7 million), while net profit increased to N104.4 billion ($65.6 million) from N13.1 billion ($8.2 million) in the same period previous year.
Aradel’s listing on the NGX is a significant milestone, increasing its position in the oil and gas sector. However, the dramatic drop in its share price demonstrates the difficulties of market volatility and regulatory ambiguity.
CardinalStone, a Nigerian investment bank, has set a 12-month price objective of N1,258.61 ($0.77) per share, assuming a market valuation of N5.47 trillion ($3.35 billion). The prediction is for a 101.2 percent return on the present price, highlighting Aradel’s growth potential in Nigeria’s oil and gas sector.
