More details have now surfaced related to what could be the world's largest initial public offering (IPO) by the world's most profitable company. According to reports citing sources close to the matter, Saudi Aramco will be listing up to 2 percent of its shares domestically on December 11. The number of shares it will be listing could potentially raise close to $40 billion, making it the largest IPO in history.
The same sources had revealed that the Saudi government could be announcing the final pricing for the IPO as early as December 5. This will then be following by the listing of the stocks on the Riyadh Stock Exchange six days later. The investor roadshow for the upcoming IPO will apparently start on November 18.
In response to questions regarding a possible international listing, the sources revealed that the Saudi government will be imposing a one-year restriction on the selling of any more Saudi Aramco shares. This means that an overseas IPO will be unlikely in 2020.
Saudi officially kicked off its domestic IPO plans on Sunday, which had come as a relief for investors who had been disappointed by a series of false starts. Officials of the state-owned oil firm stated that they will be listing domestically within the year, but they neglected to reveal any details during the weekend announcement.
Aramco was initially expected to sell up to 5 percent of its shares either domestically or internationally. However, plans were suddenly put on hold last year as the company debated on where to list its shares. The company's IPO plans were further placed on ice after the company began its process of acquiring a major stake in Saudi Basic Industries Corp.
On Sunday, Officials had stated that they will be spending the week talking with investors and bankers to gauge the demand and appetite for its shares. This will be crucial in identifying the right range for its IPO pricing given that expert valuations are varying wildly.
It was also announced on Sunday that the company and its shareholders will be subject to some restrictions in terms of the sale and issuance of shares. Major investment banks previously valued the company at around $1.5 trillion, well below the $2 trillion valuation expected by Crown Prince Mohammed bin Salman.
If the company does get a market valuation of $1.5 trillion, it will overthrow Microsft as the world's most valuable listed company. Microsoft currently has a market valuation of around $1 trillion.
