Tue, 14 Jul 2020

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.

More Kansas City News

Access More

Sign up for Kansas City News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!