Saudi Aramco is valued at up to $1.7 trillion at the price range set by the oil juggernaut on Sunday, below the $2 trillion sought by Saudi’s crown prince; however, putting it in the race to become the world’s biggest IPO.
Aramco can’t sell its shares straight to buyers in the U.S. and other markets, because the initial public offering (IPO) might be restricted to Saudis and those overseas establishments permitted to invest in the dominion’s stock market.
The oil titan mentioned it plans to offer 1.5% of the company, i.e., 3 billion shares, at an indicative price range (30 riyals to 32 riyals), valuing the IPO at up to 96 billion riyals ($25.6 billion) and giving the firm a potential market worth of $1.6 trillion to $1.7 trillion.
This could beat Chinese e-commerce titan Alibaba’s record $25 billion New York stock exchange debut back in 2014.
Aramco’s IPO size could be larger if there may be enough demand for it to use a 15% “greenshoe” over-allotment option.
Aramco kicked off its IPO on November 3 after a series of false beginnings. Crown Prince Mohammed bin Salman, who swamped the idea four years ago, is looking to raise billions of dollars to invest in non-oil sectors, create employment and shift the world’s largest crude exporter away from oil.
In its original plan, published on November 9, Aramco mentioned the domestic IPO would be made to institutional traders outside the U.S. in line with Regulation S of the U.S. Securities Act 1933.