Saudi Aramco is seeking a valuation of up to $1.7 trillion, which would become the world’s biggest IPO and confirm the company as the world’s most valuable.
The valuation is below the initial $2 trillion sought by Saudi Arabia’s leadership. The Kingdom is hoping to raise $30 billion on the local Tadawul index by offering 1.5% of the company to investors, according to reports. As Reuters notes, Aramco cannot sell its shares directly to investors in the United States and other markets, as the initial public offering (IPO) will be restricted to Saudis and those foreign institutions permitted to invest in the kingdom’s stock market.
The 1.5% of the company that will be listed will amount to about 3 billion shares, at an indicative price range of 30 riyals to 32 riyals, valuing the IPO at as much as 96 billion riyals ($25.6 billion) and giving the company a potential market value of between $1.6 trillion and $1.7 trillion, according to Reuters.
The Kingdom also has reportedly abandoned plans to formally market shares Aramco outside Saudi Arabia and the Gulf, according to the Financial Times. “Saudi Aramco executives had been due to travel to cities in the US, Asia and Europe but now investor meetings are likely to be restricted to Saudi Arabia, the UAE, Kuwait, Bahrain and Oman, according to one person briefed on the matter,” the FT reports.