Saudi Aramco IPO to raise $25.6 bil

Saudi Aramco IPO to raise $25.6 bil

Saudi Aramco's market value will exceed $2 trillion after its floating on its stock exchange, Saudi Arabian energy minister said on December 6, a day after the company hit a valuation of approximately $1.7 trillion in its initial public offering (IPO).

Aramco's final share price coming at the top of its offer range was "the proudest day" of his career, he said.

The IPO values Aramco at $1.7tn - short of its $2tn target, but making it the most valuable listed company on earth.

The company has committed to a large annual dividend until 2024 to ensure investors don't sell shares in the near future leading to a drop in market valuation. Next year, too, is expected to see even less oil production for the Kingdom, with Saudi Arabia agreeing to even lower production figure, and then offering to produce 400,000 bpd less than that figure.

The company's share sale has come in at 25.6 billion dollars, surpassing the record set by Chinese e-commerce giant Alibaba in 2014. The rest will be open to institutional investors, including sovereign wealth funds, asset managers, and government-run pension programs.

Three years after it was first announced Saudi Arabia is finally taking the world's most profitable company public.

Instead, it focused its marketing for the share sale on Saudi investors and wealthy Gulf Arab allies. It remains unclear when the shares will start trading at Tadawul, the Saudi stock exchange. Aramco has previously hinted that trading could begin this month. It also hopes to list on overseas bourses, such as the Tokyo Stock Exchange.

The IPO also carries political risk as the Saudi government, which relies on Aramco for the bulk of its revenues, controls the company.

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