Saudi Aramco has raised $25.6 billion from its initial public offering (IPO), setting the record for the largest ever IPO in history.
Saudi Arabia’s state-owned oil giant Saudi Aramco has generated $25.6 billion from its IPO, setting a world record. According to the company, it sold 3 billion shares at a price of 32 riyals or $8.53 each in its IPO, enabling it to raise more money than the previous record holder, Chinese e-commerce firm Alibaba, which raised $25 billion in 2014.
The IPO places Aramco’s value at around $1.7 trillion, becoming the highest valued publicly traded company globally, overtaking Apple, which is worth approximately $1.15 trillion.
The size of the IPO still has the potential to reach $29.4 billion if it exercises an option to sell more shares. In November, Saudi Aramco announced that it is targeting to sell around 1.5% of its 200 billion shares.
Initially, Aramco was expected to sell 5% of its shares on two exchanges, in which 2% will listed on Saudi’s Tadawul bourse while the other 3% will be sold on an overseas exchange. However, the oil giant now says it has no plans for an international sale.
The oil giant also promised its investors an annual dividend of $75 billion through 2024. This made the listing more appealing to investors as it looked more like a bond offering with promised payouts and lower risk.
The money raised from the massive IPO would be used by Saudi Arabia to fund Prince Mohammed bin Salman’s Vision 2030 plan to steer the kingdom away from oil and develop other sectors of its economy. It is also being used to convince multinational companies and foreign investors that Saudi Arabia was open for business.
Meanwhile, there remains concerns with the cost of oil. An OPEC meeting will be held in Vienna, Austria, on Thursday, and is expected to extend supply cuts that have been in place since 2017, as part of an initiative by Saudi Arabia to boost oil prices.