Saudi Oil company Aramco launched its initial public offering (IPO), which will be the biggest in history.
Aramco priced its IPO at 32 riyals ($8.53) per share, raising $25.6 billion and beating Alibaba’s record of $25 billion NYSE listing in 2014.
However, the IPO valuation is still significantly short of $2 trillion valuations sought by Saudi Crown Prince Mohammed bin Salman.
Aramco has declined to comment on the IPO pricing until the article is going live.
Aramco market valuation of $1.7 trillion overtaking Apple as the world’s most valuable listed firm. As per the news, Saudi Arabia relied on domestic and regional investors to sell its 1.5% stake because of climate change concerns, political risk and a lack of corporate transparency put foreign investors off the offering.
Saudi banks offered citizens cheap credit to bid for shares. But this time the interest was relatively low compared with other listed IPOs, including the listing of a top Saudi bank in 2014 which was oversubscribed many times.
Even this month, Alibaba’s listing in Hong Kong oversubscribed 40 times the number of shares on offer.
According to some media outlets, Abu Dhabi Investment Authority (ADIA) and Kuwait Investment Authority (KIA), sovereign wealth funds of two of Saudi Arabia’s Gulf allies, planned to invest in the deal.
Saudi citizens were offered 0.5% of the company or about a third of the offering, an unprecedented retail offering compared with previous Saudi IPOs.
Aramco has planned a dividend of $75 billion for 2020, more than five times larger than Apple’s payout, which is already among the biggest of any S&P 500 company.