Saudi Aramco IPO received $44.3 billion in bids so far: Samba Capital

Marco Green
December 3, 2019

Institutional investors have already put in 144.1 billion riyals ($38.4 billion) worth of bids for Aramco's planned IPO, which is more than double the capital it seeks to raise from institutions.

The book-building process for allocating shares to institutional buyers - typically asset managers, insurers or pension funds - began on November 17 and investors have until December 4 to place orders.

The energy giant is offering 1.5 percent, or three billion, of the company's shares on the Saudi Stock Exchange (Tadawul) at an indicative price range of SR30-SR32 ($8-$8.53).

Saudi Arabia is planning to use its position at the head of the Opec oil cartel to buoy global oil prices before the $25bn stock market debut of its state-owned oil giant.

The deal could be the world's biggest IPO if it tops the $25 billion listing of China's Alibaba in 2014.

Kuwait's government will invest as much as $1bn in the IPO as the kingdom asks regional allies to bolster the record share sale.

Aramco had said it would reserve a portion of the IPO's shares for institutional investors, including foreign companies, and individual investors, Saudi citizens and Gulf states.

Aramco IPO is seen as a test for the exchange of Arabia, where the largest listing so far worth $ 6 billion.

Aramco is expected to have an initial weight of close to 10% in the Tadawul all-share index (TASI).

It said subscriptions and bids during the first 12 days of the offer period totalled more than 166 billion riyals (US$44.3 billion, €40.2 billion).

The organisation, which pumps nearly a third of global oil supply, sees oil consumption in 2023 reaching 103.9 million barrels per day (bpd), down from 104.5 million bpd in last year's report.

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

Brent futures rose 19 cents, or 0.3%, to $61.11 a barrel by 0218 GMT, after gaining 0.7% on Monday.

As Opec's de facto leader, Saudi Arabia is expected to use its position to push other members to tighten their compliance with the group's agreed oil production limits, while cutting its own output even further than it needs to.

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

Other reports by Click Lancashire

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