July 4, 2020

Aramco will snatch Alibaba the biggest IPO in history

The Saudi state oil company opts to set the highest price of its fork for the OPV. It would raise 23.1 billion of financing and its valuation would reach 1.53 billion euros

Aramco It is on its way to starring in the biggest IPO in history and becoming the most valuable public in the world. Saudi state oil company would be considering set a price of 32 riyales per share (7.7 euros), the highest in the price range managed for its imminent IPO, which would turn the operation into the largest OPV in history by raising some 96,000 million rails (25.6 billion dollars or 23.1 billion euros), according to sources familiar with the operation cited by the Bloomberg agency. For its part, the Reuters agency reports, citing sources familiar with the situation, that the bidders of the OPV would have recommended betting on the higher price of the fork, which would raise to 1.7 trillion dollars (1.53 trillion euros) the company's valuation, which would thus become the most valuable listed company in the world. Thus, the OPV of the state oil company would become the biggest IPO of all time, as Chinese e-commerce giant Alibaba raised just over $ 25 billion with its debut on the New York Stock Exchange in September 2014.

The brochure of the operation registered by Aramco establishes December 5 as the date foreseen for the announcement of the final price of the OPV, which will be known one day after the end of the subscription term of the institutional tranche of the operation. In this regard, in the absence of a few hours for the closure of the institutional reserve period, the oil company has received subscriptions amounting to 189,100 million Riyales (45,472 million euros), as reported by the bidding entities.

High demand

According to data from Samba Capital, NCB Capital and HSBC Saudi Arabia, collected by the Al Arabiya chain, institutional investors have requested the subscription of some 5.900 million shares of Saudi Aramco, a level of demand that would almost triple the supply of paper for this section of the OPV, about 2,000 million titles. Saudi Aramco will carry out in December the placement of 1.5% of its capital in shares that will be listed on Tadawul, the stock market of Riyadh, of which 0.5% has been reserved for retail investors and 1% for institutional , like banks and funds.

Aramco closed on November 28 the subscription period for retail investors with 47,400 million subscribed rails (11,465 million euros), after the demand of individuals has overwritten by 1.5 times the supply of paper. Also, as reported by the "lead manager" of the operation, Samba Capital, the number of shares requested by retail investors was around 1,481 million.

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