Saudi Aramco to mark the largest initial public offering in history

Saudi Aramco to mark the largest initial public offering in history
Written by:
Michael Harris
5th December 2019
Updated: 11th March 2020
  • Saudi Aramco valued its shares at $8.53 (32 riyals per share) in its initial public offering.
  • Raising $25.6 billion, Aramco overtook Alibaba and marked the biggest IPO in history.
  • At $1.7 trillion market value, it overtook Apple Inc. to become the most valuable publicly traded firm.
  • Aramco is planning on opting for 15% greenshoe that will value the listing at $29.4 billion.

The national petroleum and natural gas company of Saudi Arabia, Saudi Aramco, is all set to win the title of the biggest initial public offering (IPO) in history. Crown Prince Mohammed bin Salman had previously expressed his desire to value the IPO at $2 trillion. As per the experts, however, despite being the biggest IPO in history, the state-owned oil giant is likely to fall significantly short of $2 trillion.

Aramco Valued Its Shares At $8.53, Raising $25.6 Billion In Total

As per the sources, Aramco valued its shares at $8.53 (32 riyals per share) in its initial public offering. In 2014, Alibaba’s IPO in the United States of America had seen its shares priced at $68 that helped the Chinese multinational conglomerate to raise $25 billion, making it the biggest IPO in history. Saudi Aramco, however, has raised $25.6 billion to steal the title of the biggest IPO ever for itself.

The IPO further highlights that the Saudi oil giant is currently valued at $1.7 trillion, making it the world’s most valuable firm that is publicly available to trade. Aramco’s IPO has effectively put an end to Apple’s streak of keeping the title of the most valuable listed firm across the globe to itself. The company is expected to be listed on the Riyadh stock exchange later in December.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Even at $1.7 trillion, Aramco was unable to invoke enthusiasm for foreign investments. Consequently, it relied on domestic and regional investments to realize its goal of selling 1.5% of a total of 200 billion shares. According to the experts, political risks, concerns of climate change, and lack of confidence in corporate transparency were the prominent reasons why foreign investors remained passive in Saudi Aramco’s IPO. No official statement has been released so far that highlights where does Saudi Arabia plan on listing the oil company abroad and when can it be expected.

Aramco May Also Opt For 15% Greenshoe

Earlier this month, sources had also reported that Aramco is planning on opting for 15% greenshoe that, according to an estimate, will value the listing at $29.4 billion. Aramco’s representative has refused to comment at this stage. A formal announcement regarding the IPO will be made later this week on Thursday, as per the sources.

The Organization of the Petroleum Exporting Countries (OPEC) held meetings throughout this week. In an event that it succeeds in closing a deal with prominent allies like Russia, oil supply in the upcoming weeks can be expected to be curtailed further. The supply cut is aimed at supporting global oil prices.

Invezz uses cookies to provide you with a great user experience. By using Invezz, you accept our privacy policy.