saudi aramco, aramco ipo, aramco public issue

Saudi Aramco's much-awaited initial public offering (IPO), which aims to raise up to $100 billion in the world's biggest stock sale, will be announced soon.

Although Saudi Aramco has decided to float around 5 per cent of government stake to both local and overseas investors, the portion reserved for local investors is not yet known.

The share offer is the centrepiece of the Kingdom's Vision 2030 strategy that aims at revamping its economy through diversification under the leadership of Crown Prince Mohammed bin Salman.

However, the share offer is going to be cleared in less than two months of massive attacks on the company's oil installations that the government has blamed on Iran.

Aramco's valuation at $2 trillion makes the oil producer the most valuable company in the world.

The shares, according to media reports, will be first listed on the Saudi bourse sometime in November, as the proceeds of the share sale would be used to support the much-needed diversification programme.

A Bloomberg report earlier indicated that Saudi Aramco board would meet with its advisers this week to proceed with the mega share sale, which aims at attracting local investors through a massive nation-wide campaign.

"When you talk about Aramco, you talk about almost the main source of revenue for the kingdom of Saudi Arabia," Eid Al Shamri, chief executive of investment bank Ithraa Capital, was quoted as saying by Bloomberg. "It's as if you're buying the main revenue of Saudi, and in my opinion, the $2 trillion is a cheap one."

Domestic Investors

Saudi nationals are being encouraged to invest in the share sale of the company, which is considered as the Kingdom's most important asset. However, institutional investors, including pension funds, take into consideration the prevailing oil price before investing their funds in the company.

Like other Gulf states, Saudi banks will provide loan for retail investors to apply for the mega share offer.

The oil giant has already appointed several multinational banks, including Bank of America, Citigroup and Credit Suisse Group, to work on the share sale.