Saudi Aramco Raises Record $29.4 Billion in IPO Through Over-Allotment

Marco Green
January 14, 2020

The oil and gas company, which is majority owned by the state, began publicly trading on the local Saudi Tadawul exchange on December 11. It is trading nearly 10% higher from the IPO price.

Aramco's additional sales mean the company has publicly floated 1.7pc of its shares. It's IPO, even before the added sales, was the world's largest ever.

Aramco's share price quickly spiked in its first two days of trading on Saudi Arabia's Tadawul stock exchange to give it the $2 trillion valuation sought by Crown Prince Mohammed bin Salman.

The greenshoe option allows companies to sell additional shares after an IPO has been completed should there be enough demand from investors.

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But the stock has taken a hit in recent weeks amid mounting tensions in the Middle East. Aramco shares hit a low of 34 riyals, or $9.06, on January 8 as markets grappled with the January 3 U.S. airstrike that killed Iranian Gen. Qassem Soleimani.

Aramco's shares closed at SR35 ($9.33) last Thursday, valuing the company at $1.87 trillion and continuing its reign as by far the most valuable company in the world.

Aramco shares have been volatile amid heightened tensions between the United States and Iran, which lies across the Gulf from Saudi Arabia.

The IPO relied heavily on individuals and high-net-worth investors and funds from the Gulf, with the Saudi government institutions investing nearly US$2.3 billion into the offering. But global fund managers were unimpressed by the dividend yield on offer, among other factors, forcing the Saudis to scale back their ambitions.

Other reports by Click Lancashire

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