The state-owned petroleum company, Saudi Arabia Saudi Aramco, estimated its coming IPO at 2 trillion dollars. However, according to a survey by Bloomberg of 24 big money managers, this assessment can be reduced by up to 40% when it is released. The survey showed that more than 40% of money managers valued the company to $1.2 trillion and a further 25% lower, at or below $1.1 trillion.
According to figures released so far, the lead manager before Dec 4 closed the institutional investors ' bid, Saudi Aramco's original public offering (IPO) was to be subscribed, but not by a huge margin.
SAMBA Capital, the lead manager, said that Saudi-Arabia aims to raise its value by 1,7 times with its sale of 1.5 percent of the state-owned oil giant by Friday's bids from institutional and retail investors totaling $44.3 billion.
The interest rate of the IPO is more than enough but relative to other emerging market IPOs it is relatively diminishing and even decreases compared with 2014's listing of the top Saudi bank, which was often over-subscribed.
When Riyadh achieved its goal of raising riyals of 96 billion dollars or more, it would still be an International Property Organisation's world record and ranked the Company with a valuation of approximately 1 trillion dollars.
That is less than Saudi Crown Prince Mohammed bin Salman's $2 billion worth of money, but he placed the sale at the core of his program, raising money to ambitious plans to differentiate the oil-reliant economy of the Kingdom.
Riyadh rejected its original IPO plans and dispelled an international roadshow to push the offer among the rich Gulf Arab allies instead. It remained silent when and where the stock could be listed overseas, the key to the plans revealed for the first time in 2016.
Bankers claimed that roadshows in New York and London were canceled after the planned valuation was balked by international investors.
Tags : petroleum company, Saudi Arabia Saudi Aramco, Saudi Aramco IPO, IPO, small margin,