Aramco's IPO breaks all records and earns the biggest listing scepter of all time, confirming forecasts. The tranche dedicated to institutional investors reached requests equal to three times the shares offered with orders for 5,9 million shares and 189,04 billion riyals, equal to 50,4 billion, according to reports from the global coordinators of the IPO. Samba Capital, Ncb and HSBC.
Numbers that allow the oil giant to be able to establish a price for the listing at the top of the announced price range. Demand from Saudi and Gulf companies and funds is high. The bookbuilding process for the assignment of shares to institutional buyers, which started on November 17th, closed on Wednesday at 17pm in Saudi Arabia (15pm in Italy). The decision on the placement price should have arrived on Thursday morning, but 24 hours after the closing, no indication has been disclosed.
1,5% of the shares were placed on the market with 0,5% destined for retail, the offer of which closed on November 28 with subscriptions for 47,4 billion riyals, equivalent to approximately 1,5 times the number of shares offered. A price of 32 riyals, the top of the price range the placement would result in raised $25,6 billion necessary to overcome the record held by Alibaba (25 billion dollars in the 2014 listing in New York).
Analysts explain that the unprecedented size of Aramco's listing makes it more difficult to gauge the level of demand. But while the lead managers did not provide a breakdown of institutional investors, they had said in recent days that most of the orders came from Saudi and Gulf companies and funds. Moreover, Riyadh has modified its original plans by canceling the international roadshow to concentrate precisely on the offer to the institutions of the Arab Gulf, close to the Saudi royal family. But above all he reduced the amount compared to the original plans of the crown prince Mohammed bin Salman which aimed at a higher valuation. And it seems unlikely that you will not opt for trying to establish the highest price. Even if some analysts do not exclude that the final price could be slightly below the maximum price of 32 riyals to ensure a good performance in the first trading days.
(Last update: 12.45 am on 5 December).
