Thu, 12 Dec 2019

Institutions rush for stock in Saudi Aramco

Lola Evans
22 Nov 2019, 21:11 GMT+10

RIYADH, Saudi Arabia - Institutions and individual investors appear to have rushed to subscribe to shares in the world's most profitable company, Saudi Aramco.

With only 1.5% of new shares being issued, and the capital-raising limited to around $25 billion, demand is tight.

The 1% institutional allocation of initial public offering (IPO) is already oversubscribed, with $17.1 billion (64 billion riyals) worth of orders in hand.

The retail allocation has reportedly reached $2.67 billion (10 billion riyals), a banking source was quoted by Al Arabiya as saying on Thursday.

Institutions have until 4 December to subscribe. The final price for the shares will be determined on 5 December.

The company set an indicative price range of $8 to $8.53 (30-32 riyals) per share, which would capitalise Saudi Aramco at between $1.6 and $1.7 trillion.

The company, which made a profit last year of $111.1 billion, according to the prospectus will pay a dividend of $75 billion in 2020, for a yield on the new shares of just over 4%.

The company has reported a profit of $68 billion for the first three quarters of this year which equates to $90.67 billion annualised.

When the IPO is finalised Saudi Aramco's shares will list on the the Saudi Stock Exchange Tadawul.

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