Aramco IPO bids reach $44.3B

Cornelia Mascio
Dicembre 3, 2019

Institutional investors launched 144.1 billion riyals ($ 38.4 billion) in anticipation of Saudi Aramco 's IPO, the equivalent of more than double the number of listed companies. shares on sale, announced Monday the financial advisors of the initial public offering.

Saudi Arabia is looking to raise more than $25 billion selling a 1.5% stake in the world's largest oil producer.

"Any constituent whose index weight reaches or exceeds the threshold will be capped in accordance with the set limit", Tadawul said in a statement.

Saudi Arabia's launch of the Aramco IPO has so far received a mixed response from investors, 1.7 times oversubscribed.

The retail tranche of the offering - which closed to subscribers on Thursday - has had bids totalling 47.4 billion riyals ($12.64 billion), around 1.5 times the amount of shares on offer to retail investors.

Currently Al Rajhi Bank has the largest weighting on the TASI at around 16%, followed by National Commercial Bank (NCB) with 7% and petrochemical giant SABIC with 6.8%. The retail investment ended yesterday, but institutional investors still can purchase shares up to next week.

The fund has interests in ports, airports and power distribution globally.

"They (the Saudis) want to surprise the market", one of the sources said.

The OPEC source told media that "There is a discussion about a deeper cut taking place" and cited forecasts for "a big stock build in the first half of the year - we need to keep an eye on that".

The deal is the centerpiece of Crown Prince Mohammed bin Salman's plans to diversify the Saudi economy away from oil.

OPEC's production of crude oil and other liquids is expected to decline to 32.8 million barrels per day (bpd) by 2024, the group said in its 2019 World Oil Outlook published on Tuesday.

Chris Midgley, the head of analytics at S&P Global Platts, said Saudi Arabia had been strongly lobbying members of Opec and Opec+ to increase compliance.

The veteran oil official, known as a tough negotiator, wants to ensure oil prices stay high enough for Aramco's IPO, sources said.

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