Saudi Aramco, the world’s biggest IPO, lists for US$3.8 billion more

The Saudi Arabian Oil Company Aramco, or Saudi Aramco, has exercised its “greenshoe option” which increased the size of its record breaking public offering.

Saudi Aramco raised a record-setting US$29.4 billion in its IPO.  (Photo: nyt.com)

Saudi Aramco issued an additional 450 million shares via a greenshoe option, which allowed it to issue its over-allotment, increasing its IPO to US$29.4 billion, an additional US$3.8 billion.

At the time of the issuing, the state-owned out company listed three billion shares at a price of US$8.53 each, which surpassed the US$25 billion raised by Chinese e-commerce giant, Alibaba in 2014.

The Saudi state-owned company sold roughly 1.5 per cent of its 200 billion shares in the IPO which ultimately values the company at US$1.7 trillion.

The December 2019 IPO puts the company at a US$1.7 trillion valuation.
(Photo: Arabian Gulf Economic News)

However, the success of the IPO was relative as it was primarily supported by local investors, and initially fell short of the Crown Prince Mohammed bin Salman’s projected valuation of US$2 trillion. However, the shares spiked briefly after being issued which saw it reach the dizzying height.

Since then, tensions in the Middle East have, including the United States’ assassination of Iran’s top general Qassem Soleimani two weeks ago, affected the company’s performance.

Saudi Aramco has had a series of attacks on its facilities this year. (Photo: Yahoo News)

In May 2019, the company’s East-West pipeline was attacked by unmanned drones carrying explosives which resulted in it being put out of operation for some time. This was followed by two separate attacks at facilities in August and September, the latter of which resulted in Saudi Aramco’s crude oil production being cut by more than half.

The company said its production has returned to the same level prior to the September attack.

Estimates for Aramco’s current valuation are around US$1.86 trillion.