Bloomberg/Simon Dawson
Saudi Aramco’s initial public offering (IPO) has drawn total bids of SAR 166 billion ($44.3 billion) so far from institutional and retail investors, about 1.7 times the amount the government is seeking to raise, reported Bloomberg.
In the retail tranche, where final bids were due last night, 4.9 million people applied for shares with a total value of SAR 47.4 billion. Samba Capital, one of the deal’s lead managers said that institutional investors, who have until next week to submit bids, have made subscriptions for SAR 118.9 billion of shares—of that, 10.5 per cent came from non-Saudi investors.
The Saudi government plans to raise more than $25 billion by selling a 1.5 per cent stake in the company at a valuation of between $1.6 trillion and $1.7 trillion. Within that one per cent is earmarked for institutional investors and the rest for Saudi retail buyers, who’ve been targeted by a country-wide advertising campaign and offered larger-than-usual loans to finance purchases.
There may be a last-minute surge from institutional investors, but so far the share sale has not been as well subscribed as some other IPOs in the country.
The Saudi Aramco IPO, a central element in Crown Prince Mohammed bin Salman’s plan to modernise the Kingdom’s economy, will rely almost entirely on local money after international investors balked at the valuation
Abu Dhabi plans to put as much as $1.5 billion into the offering, while the Kuwait Investment Authority is considering a potential investment—institutional book-building closes on 4 December 2019, before the IPO’s final pricing the next day.
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