Facts You Should Know About The World’s Biggest IPO

Facts You Should Know About The World’s Biggest IPO
Rajat Mishra - 07 December 2019

New Delhi, December 6: The market debut of oil giant Saudi Aramco has been hogging limelight and also is one of the most sought after Initial Public Offering (IPO). Again, the oil giant came to the news, as the company has priced its share at such a level that it would raise $ 25.6 billion. This sum is expected to make it the world’s biggest IPO. The IPO will establish Aramco as one of the world’s most valuable companies, but the $1.7 trillion figure falls short of the royal family’s anticipated value that comes close to $2 trillion.

Aramco is short for Arabian American Oil Company was nationalised by the Saudi government in the 1970s.

Saudi Aramco set the initial share price at 32 riyals, or about $8.53. It plans to sell three billion shares, 1.5 per cent of the company. At that price, the company would be worth $1.7 trillion.

Aramco will sell its shares on the Riyadh stock market, the Tadawul. Trading is expected to begin on Wednesday.

This IPO will surpass the biggest IPO record set by Alibaba at $25 billion in 2014. Followed by the IPO record set by Agricultural Bank of China that was worth $ 22 billion.

The listing would also topple Apple as the world’s most valuable listed company by valuing Aramco’s total market worth at $1.7tn. Apple is valued at $1.17tn.

The reason behind this big IPO is the royal king’s focus to diverge from the path of oil centric economy and in order to diversify the IPO was set in place.

Aramco produced 13.6 million barrels per day in 2018 on average, more than three times the 3.8 million reported by Exxon Mobil, according to the reports.

The initial plan was to sell a 5 per cent stake to raise as much as $100 billion via international and domestic listings.

Earlier Armco was planning to list itself on the Riyadh Stock Exchange and London Stock Exchange but Saudi trod the safe path and decided not to list itself on the London Stock Exchange as it would require serious disclosures.