Saudi Aramco IPO subscriptions reach SR73bn in first 5 days

RIYADH: Institutional tranche and retail subscriptions to Saudi Aramco’s initial public offering have reached almost SR73 billion in less than a week, Samba Capital Vice-Chairman Rania Nashar said on Thursday.

“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, and we anticipate further increases in subscription levels during the remainder of the offering period,” she said.

Institutional subscriptions amounted to SR58.4 billion and 1.8 billion total subscribed shares. Retail subscriptions were worth SR14.6 billion, representing 1.8 million subscribers and 465 million total subscribed shares.

Earlier, it was announced that the Kingdom will sell 3 billion shares in Aramco during its stock market launch — representing about 1.5 percent of the total — at a valuation between SR30 ($8) and SR32 a share. This gives the business a total valuation of between $1.6 and $1.7 trillion, making it the most valuable company in history.

Investment professionals welcomed the valuation, which was below than the highest estimates of Aramco’s worth, as a “compromise” between the Kingdom and the financial world.

Setting a price range and the number of shares to be sold starts a “book-building” process during which Aramco and its advisers will consult potential investors and await bids from institutions and private investors to help decide at what price the shares will be sold. The final pricing decision will be announced on Dec. 5, with trading expected to start on the Tadawul shortly after.