Aramco said the IPO would be split into two tranches – one each for institutional and individual investors.
Saudi Arabia’s oil giant Aramco on Sunday announced its plan to launch an IPO and list on the Kingdom’s main Tadawul bourse.
Aramco said the IPO would be split into two tranches – one each for institutional and individual investors. The Saudi market regulator has issued an exemption for non-resident institutional foreign investors to subscribe the IPO. While Saudi nationals would be eligible to receive bonus shares.
Devesh Mamtani, president of investment and advisory services at Century Financial, said Saudi regulator’s exemption to sell Aramco’s shares to non-resident institutional foreign investors means the UAE nationals can purchase shares of the world’s largest company.
“The Tranche (B) of the Aramco IPO makes it clear that any GCC national can apply and for other nationals, only if they are residing in Saudi Arabia. The IPO is viewed as a national event among the Saudi citizens and it looks like the IPO will be easily oversubscribed,” Mamtani said.
Other analysts say more clarity will be revealed once prospectus is released later this month.
Aramco on Sunday announced $68 billion (Dh249.56 billion) profit for the first nine months of 2019.
Though Aramco’s valuation is still not known, bankers estimated it to be between $1.5 trillion to $2 trillion. Industry executives estimate that oil giant will sell 1 or 2 per cent of its share, raising as much as $20-$40 billion. Full details will revealed in due course.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said evaluation will be critical and that is going to be a key point for FIIs.
Arabic media reported that investor applications for IPO are expected from December 4 while trading of shares will commence from December 11.
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