Saudi Aramko has set a price range for its ad, suggesting the oil giant is worth between $ 1.6 trillion to $ 1.7 trillion, below the $ 2 trillion Saudi Arabian throne has targeted, but still has makes potentially the largest initial public offering in the world.
Aramco said on Sunday it plans to sell 1.5 percent of its shares, or about three billion shares, at an indicative price range of $ 30 ($ 8.00) to $ 32 ($ 8.53) each – valuing an IPO a total of 96 billion riyals ($ 25.60 billion) at the top of the range.
If its price is the highest, the deal could just beat the record $ 25 billion raised by Chinese e-commerce giant Alibaba in its stock market debut in New York in 201
of Aramco is the centerpiece of the Crown Prince Mohammed bin Salman's plan to diversify the world's largest exporter of raw materials away from oil.
Aramco has no plans to market its domestic IPOs abroad, three familiar with what has been said, suggesting that international roadblocks will not take place.
"This will put the burden of the deal on local and regional banks," one in three said.
"This means that most investors will participate as qualified foreign investors in a Saudi deal," said another of the people.
Aramco finally launched its IPO on November 3 after a series of false launches. who, about 4 years ago, floated the idea of being listed, is seeking to raise billions of dollars through a deal to invest in non-oil industries and generate employment.
But the investment world is still trying to work out what the secret is all about. your company Analysts from Riyadh-based banks have predicted a wide range of Aramco valuations of between $ 1.2 trillion and $ 2.3 trillion.
On the one hand, Aramco is the world's most profitable company with a planned dividend of $ 75 billion next year, more than five times the payout of Apple, which is already the largest of any S&P 500 company.
On the other hand, this is a bet on the price of oil at a time when expects global demand to slow down from 2025 as measures to reduce greenhouse gas emissions these are deployed and the use of electric vehicles is increasing.
A risky bet?
The deal is also fraught with political risk, as the Saudi government – which relies on Aramko for most of its funding – will continue to control the company. Prince Mohammed's reputation was tarnished by the assassination of Saudi journalist Jamal Hashoggi last year.
In addition, Aramco's oil plants were targeted on September 14 in attacks that initially reduced production. The company said the strikes would not have a significant impact on its business.
The sale of shares is expected to be a big hit among Saudi citizens, who are offered 0.5 percent of the company.
Al Jazeera's economic editor, Abid Ali, says many of the country's billionaires, some of whom were detained by Saudi authorities at a hotel in Riyadh Carleton in Riyadh, are also likely to be high on corruption investors when the shares are sold.
"level, this will be a success because on the day the shares will be sold, the Saudi pension funds, the investment funds will take all other shares," Ali said.
But, according to him, international investors are staying away.
"There are different ways to evaluate Saudi Aramco. The price of oil, free cash flow and dividends is used. And with most of these measures, math and many international investors did not want to be passengers in a car driven by the Saudi authorities." , he added.
Retail investors have until November 28 to register for an IPO, while institutional investors can subscribe by December 4, with company executives making marketing views this week.
Aramco's listing means a quick end-of-year stock market move, with Alibaba currently accepting orders for a Hong Kong listing that is expected to raise up to $ 13.4 billion for the online retailer.
The list in Riyadh comes after initial hopes for a five percent IPO on domestic and international exchanges were dropped last year amid debate overvaluation and where to list Aramco abroad.
Aramco stated that the IPO schedule was delayed because it began a process to acquire a 70 percent stake in petrochemicals manufacturer Saudi Basic Industries Corp.
Al Jazeera and news agencies