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Saudi Aramco's IPO raises $19.47bn in five days

By Charlotte Ricca

A third of the oil firm’s sale is offered to local retail investors

Saudi Aramco's initial public offering (IPO) has raised 73bn SAR ($19.47bn, £15.12bn) within the first five days.

The state-owned oil firm plans to sell 1.5 per cent of the company, equal to approximately three billion shares. With each share costing around 30 SAR, this values the IPO at 90bn SAR – a fraction of the 375bn SAR that Crown Prince Mohammed bin Salman originally hoped to make.

There has been a big push by Aramco to sell shares to local retail investors, after they abandoned plans to market shares to investors outside of Saudi Arabia and its Gulf neighbours, due to a lack of interest.

Saudi banks are offering loans with zero interest for up to three months, while the oil company said it will give a bonus share for every 10 shares to investors who hold their listing allocation for a minimum of 180 days.

To date, around 1.8 million retail subscribers have invested more than 14bn SAR, while a further 1.82 institutional subscribers have raised 58.4bn SAR.

“Retail and institutional subscription levels for the first five days of the offering have reached an unprecedented scale, demonstrating the confidence of investors in Saudi Aramco,” said Samba Capital’s vice chairman, Rania Nashar, in a statement.

“We anticipate further increases in subscription levels during the remainder of the offering period.”

Aramco expects at least 30 per cent of the sale to be snapped up by retail investors, who have until November 28 to subscribe. Institutional investors can sign up until December 4.

The Crown Prince plans to use the money raised to invest in non-oil industries.

FURTHER READING: Saudi Aramco valued at $1.7 trillion ahead of flotation

FURTHER READING: Major Asian logistics operator ESR Cayman raises $1.6bn IPO in Hong Kong

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