June 14, 2024

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World’s biggest company : Saudi Aramco IPO expected at $1.7 trillion

2 min read

Saudi Aramco is expected to price its initial public offering Thursday at the high end of the targeted range to give the oil giant a total value of $1.7 trillion in what would be the world’s biggest-ever IPO, according to people familiar with the matter.

The state-controlled Saudi Arabian Oil Co., commonly known as Aramco, is set to sell 3 billion shares or 1.5% stake of the company at 32 Saudi riyals ($8.53), or at the top of the targeted range of 30 to 32 riyals for a total of $25.6 billion. That would exceed the $25 billion IPO in 2014 of Chinese online commerce company Alibaba Group Holding Ltd., the current record holder.

Still, the share sale falls well short of the initial $2 trillion valuation targeted by Saudi Crown Prince Mohammed bin Salman. The shortfall also risks over exposing Saudi Arabia’s middle-class investors to the future stock-market performance of one company, as many institutional investors outside the country and the surrounding region passed on the offering as too expensive, according to people involved in the IPO process.

An Aramco representative declined to comment.

Largely driven by domestic and regional individual and institutional investor support, demand for the offering was strong as Aramco had already attracted more than $60 billion of orders as of Tuesday.

That interest places the IPO underwriters on track to exercise the offering’s so-called overallotment option of an additional 450 million shares to increase the total funds raised to close to $30 billion from the sale.

Aramco’s shares are scheduled to start trading Dec. 11 on Saudi Arabia’s Tadawul stock exchange.

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