Saudi Aramco has raised US$25.6bn from its initial public offering (IPO) on the Tadawul (Saudi Stock Exchange), which was 4.7 times oversubscribed. About 1.5% of the company was sold, priced at SAR32 (US$8.53) per share that has given Saudi Aramco a market valuation of US$1,700bn.
Total bids reached US$118.6bn, with US$106bn coming from institutional investors, including Saudi funds and enterprises, and U$12.6bn from institutional investors. About a third of the offering, or 0.5% of the company, was set aside for Saudi citizens. Around 4.9 million Saudi retail investors have bought shares in the company.
Saudi Arabia tried to improve the corporation’s appeal by promising an annual U$75bn dividend, modifying tax and royalty rates as well as reducing long-term capital spending to help cash flows. The government disclosed the idea of an Saudi Aramco’s IPO in 2016, seeking to raise as much as $100 bn, with a dual listing on the domestic stock exchange and on an overseas bourse.
The sale proceeds will be assigned to the Public Investment Fund, to help diversify the kingdom away from oil and create jobs for a growing population.