DUBAI: Saudi Aramco is worth up to $1.7 trillion at the price range set by the oil giant on Sunday, below the $2tr sought by Saudi Arabia’s crown prince but putting it in the running to become the world’s biggest IPO.

Aramco cannot sell its shares directly to investors in the United States and other markets, as the initial public offering (IPO) will be restricted to Saudis and those foreign institutions permitted to invest in the kingdom’s stock market.

The oil giant said it plans to sell 1.5 per cent of the company, or about three billion shares, at an indicative price range of 30 riyals to 32 riyals, valuing the IPO at as much as 96 billion riyals ($25.6 billion) and giving the company a potential market value of between $1.6tr and $1.7tr.

This could just beat Chinese e-commerce giant Alibaba’s record $25bn New York stock market debut in 2014. Aramco’s IPO size could be bigger if there is enough demand for it to use a 15pc “greenshoe” over-allotment option.

“We are planning to subscribe to the IPO in two funds that we manage,” said Zachary Cefaratti, chief executive officer of Dubai-based Dalma Capital Management Ltd, adding that the preliminary valuation was “in line with our expectations”.

Aramco kicked off its IPO on Nov 3 after a series of false starts. Crown Prince Mohammed bin Salman, who floated the idea nearly four years ago, is seeking to raise billions of dollars to invest in non-oil industries, create employment and diversify the world’s top crude exporter away from oil.

In its original prospectus, published on Nov 9, Aramco said the domestic IPO would be made to institutional investors outside the United States according to Regulation S of the United States Securities Act of 1933, and inside the United States under the Rule 144A of the US Securities Act. But on Sunday in an addendum to the IPO prospectus Aramco said that it had removed any reference to such regulations.

Published in Dawn, November 18th, 2019

Opinion

Editorial

Wheat price crash
Updated 20 May, 2024

Wheat price crash

What the government has done to Punjab’s smallholder wheat growers by staying out of the market amid crashing prices is deplorable.
Afghan corruption
20 May, 2024

Afghan corruption

AMONGST the reasons that the Afghan Taliban marched into Kabul in August 2021 without any resistance to speak of ...
Volleyball triumph
20 May, 2024

Volleyball triumph

IN the last week, while Pakistan’s cricket team savoured a come-from-behind T20 series victory against Ireland,...
Border clashes
19 May, 2024

Border clashes

THE Pakistan-Afghanistan frontier has witnessed another series of flare-ups, this time in the Kurram tribal district...
Penalising the dutiful
19 May, 2024

Penalising the dutiful

DOES the government feel no remorse in burdening honest citizens with the cost of its own ineptitude? With the ...
Students in Kyrgyzstan
Updated 19 May, 2024

Students in Kyrgyzstan

The govt ought to take a direct approach comprising convincing communication with the students and Kyrgyz authorities.