Saudi Aramco IPO’s retail tranche oversubscribed: Lead manager

RIYADH: The retail portion of Saudi Aramco’s initial public offering (IPO) has been oversubscribed, with orders reaching 38.1 billion Saudi riyals (US$10.2 bil), lead manager Samba Capital said on Nov 28.

The state oil giant plans to sell a 1.5% stake, or about three billion shares, and has said at least one-third of the sale is expected to be covered by retail investors, who had until noon on Nov 28 to sign up.

With an indicative price of 30-32 riyals, the IPO is valued at as much as 96 billion riyals (US$25.6 bil) and gives the firm a market value of US$1.6-1.7 tril.

It will be the world’s biggest IPO if it tops the US$25 bil set by China’s Alibaba in 2014.

Around 4.17 million retail investors had subscribed to 1.19 billion shares by the deadline, injecting 6.13 billion riyals above the amount needed for full coverage, Samba said.

The IPO is the centerpiece of Crown Prince Mohammed Salman’s plans to diversify the Saudi economy away from its reliance on oil.

Aramco is the crown jewel of the economy and the world’s most profitable company.

It is relying on local and regional demand to pull off the deal, after cancelling marketing roadshows outside the Gulf region due to a lack of interest from foreign institutional investors.

Sources told Reuters that the sovereign wealth funds of Abu Dhabi and Kuwait plan to invest.

Saudis have been eager to buy shares, with many seeking to invest on behalf of their dependants to increase the number of shares they can buy.

The government has encouraged rich Saudis to invest, with many viewing it as an opportunity to show their patriotism after a September attack on Aramco facilities that struck at the heart of the kingdom’s energy industry.

Washington and Riyadh blamed regional rival Iran for the attacks, which temporarily cut more than 5% of global oil supply. Tehran denied any involvement. – Reuters


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