Saudi Aramco declares $1.71 trillion valuation in blockbuster IPO


The company would raise US$24 billion if the deal prices at the lower end - just shy of the US$25 billion raised by Alibaba Group Holding Ltd (now里巴巴), now the world's largest initial public offering (IPO).

But on Sunday, in an addendum to the IPO prospectus, Aramco said that it had removed any reference to such regulations, which three people familiar with the matter said suggested there would not be any global roadshows to market the shares. The roadshow is expected to move on to Europe this week.

"Aramco will have a sizable weight of almost 10% in the Saudi local market index based the current price range and stake, and Saudi Arabia's weight in the MSCI Emerging Markets index will also increase as a result".

The final version of the prospectus didn't identify any cornerstone investors, though the company is still in talks with Middle Eastern, Chinese and Russian funds.

Among those considering a sizeable investment is Prince Al-Waleed bin Talal, a billionaire tycoon who was held in Riyadh's palatial Ritz-Carlton hotel in 2017 during a crackdown on corruption, Bloomberg News reported. That dwarfs the roughly $1 trillion valuations of Apple and Microsoft. That would offer a return on their investment close to other leading oil and gas companies like Exxon Mobil Corp. and Royal Dutch Shell Plc. It made $111 billion in profit in 2018, and has promised to pay an annual dividend of $75 billion through 2024.

The IPO time also indicates that the announcement of final offer price and allocations of shares to institutional and retail investors as December 5, with the refund of excess subscription funds (if any) to retail investors on December 12. He first proposed the IPO in 2016. "It takes into account issues of supply that are very fluid, and demand that doesn't look so good now".

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Bin Salman, who floated the idea for the IPO 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.

An updated version of the IPO prospectus states that the offering will be open to qualified foreign investors (QFIs) and investors within Saudi Arabia.

Speaking in Riyadh on Sunday, Nasser acknowledged the prospect of peak demand, but argued that with the lowest production costs in the industry, Aramco would be able to win market share from less efficient producers.

She also expected that the number of retail investors subscribing to Aramco is higher than any previous subscription in the market, noting that the announced price range represents a great opportunity for all investors.

After the flotation, Aramco will not list any more shares for six months, the prospectus says. But he is pushing forward with the IPO even at a lower price, apparently anxious that continued delays could impact his clout and Saudi Arabia's global standing.