In what could be the biggest Initial Public Offering (IPO) ever, Aramco – Saudi Arabia’s biggest oil company – has confirmed that it plans to list on the Riyadh stock exchange.
Aramco is state-owned and is also the world’s most profitable company. According to financial analysts, it is worth a whopping $1.2 trillion. For the first half of this year, the company posted a net profit of a massive $46.9 billion, which is more than double the net profit of Apple, the world’s largest company by value. The company also holds a monopoly in Saudi Arabia, the world’s biggest exporter of crude oil.
Aramco, which goes by the official name of Saudi Arabian Oil Company, however, did not give details of how much stake the company would sell or the timeline of events.
Sources have confirmed that the company plans to offer around 1 to 2 per cent of its shares, raising as much as $20 to $40 billion. The biggest IPO till date was that of Chinese e-commerce behemoth Alibaba in 2014 when it raised close to $25 million.
“Today is the right opportunity for new investors to reap the benefits of Aramco’s ability to achieve value, and boost it on the long-term,” Aramco Chairman Yasir al-Rumayyan told at a news conference at Aramco’s headquarters in the eastern city of Dhahran.
The move comes amid a deliberate attempt by Saudi Crown Prince Mohammed bin Salman’s plan to move away from its reliance on oil.
Will this be the biggest IPO ever? Only time will tell.