Largest IPO listing kicked off; Aramco to list on domestic bourse

State-owned oil company Saudi Aramco has kicked off its initial public offering (IPO) to float on the domestic bourse in what is said to be the world’s largest listing. However, against the back of delays in the announcement, Aramco did not specify on the number of shares to be sold, pricing or the date for a launch. Sources say it is expected to list 1% or 2% of the company on Tadawul, the local stock exchange, raising as much as US$20 billion to US$40 billion.

Aramco also said it will determine the IPO launch date after registering interest from investors.

Meanwhile, a Reuters report says investors will likely value the company at around US$1.5 trillion, below the US$2 trillion valuation touted by Crown Prince Mohammed bin Salman when he first floated the idea of an IPO nearly four years ago. But even at US$1.5 trillion it is worth at least 50% more than the world’s most valuable listed companies, Microsoft Corp and Apple Inc, which each have a market capitalisation of about US$1 trillion.

“Today is the right opportunity for new investors to reap the benefits of Aramco’s ability to achieve value, and boost it on the long-term,” Aramco Chairman Yasir al-Rumayyan told a news conference at the company’s headquarters in the eastern city of Dhahran.

Rumayyan said a decision on an international listing for Aramco shares will be made in the future, without giving a time frame or possible venue.

The IPO is designed to turbocharge Prince Mohammed’s ambitious economic reform agenda by raising billions to build non-energy industries and diversify revenue streams.

its net income for the third quarter of 2019 amounted to US$21.1 billion, according to Reuters, dwarfing the income for the same period of oil giants such as ExxonMobil Corp, which was just over US$3 billion.

Aramco had said the IPO was delayed because it began a process to acquire a 70% stake in petrochemicals maker Saudi Basic Industries Corp. (Sabic).

Aramco also did not mention what further measures it has taken to beef up security following unprecedented attacks on its oil plants in September.