Aramco’s institutional investment more than doubles ahead of tomorrow's deadline

Saudi Aramco has done it again – just last week, the state-owned
oil company closed its retail investment slots having received slightly more
than 1.7 times more investment than the anticipated amount.

But yesterday, the oil giant’s subscription went through the roof as it recorded 144.1 billion riyals ($38.4 billion) worth of bids for its Initial Public Offering under the institutional investors’ slots. The amount equates to more than 200% of the number of shares for sales to institutional investors, the IPO’s fund managers said on Monday.

Aramco set out to sell a 1.5% share of the company for $25.6 billion. The underwriting process began
last month with an allocation of shares to institutional investors essentially
made up of asset managers, insurers and pension funds. The last day for subscribing
to the company’s shares is Dec. 4.

As
per a report issued by Aramco, NCB Capital, HSBC, and Samba Capital, as of
yesterday, the company had received subscribers under the institutional
category for about 4.6 billion shares.

But while
the investment has more than doubled, as the 5^th December deadline approaches,
things have been quieting down. A few companies in the past have had more
successful IPOs in the kingdom including the Saudi Bank one, that was oversubscribed
to by more than 10 billion investors.

Aramco’s IPO
is set to be the world’s biggest listing, after Alibaba’s $25 billion IPO in
2014.

While a
proper breakdown about the institutional numbers hasn’t been availed by the IPO’s
underwriters, last week Samba Capital noted that a substantial amount of the
netted investment came from local companies and about 10.5% from foreign
investors.

Aramco’s retail
tranche closed last Friday having received bids worth 47.4 billion riyals, which
accounts for approximately 1.5 times the number of shares issued.

The Saudi
government last week decided to scale down its IPO
campaigns across the city and instead focus on approaching individual
institutional investors drawn from the wealthy Gulf Arab allies.

Aramco is
yet to disclose when and where it will list internationally.