A Saudi Aramco Natural Gas Liquids (NGL) facility. Photo: Reuters (REUTERS)
A Saudi Aramco Natural Gas Liquids (NGL) facility. Photo: Reuters (REUTERS)

World's most profitable company's IPO opens on November 17: 10 things to know

  • Saudi Aramco, which pumps 10% of global oil supply, will get listed on Riyadh stock market
  • Key details were missing from the prospectus, including the company's valuation

In what is expected to be the world's biggest initial public offering, Saudi Aramco, the world's most profitable company, would start taking bids from investors on November 17. In the highly anticipated stock offering, the oil company has not disclosed the size of the sale or the pricing range in its prospectus. Saudi Aramco's prospectus says that the price at which all subscribers in the offering will purchase shares, the number of shares to be sold, and the percentage of the shares to be sold will be determined at the end of the book-building period.

Here are 10 things to know about Saudi Aramco''s IPO:

1) The Saudi Aramco IPO consists of sale of a portion of shares held by Saudi government.

2) The IPO for individual subscribers begins on 17th November and and closes on 28th November.

3) Saudi Aramco last year posted $111.1 billion in net profit. In the first nine months of this year, its net profit dropped 18% compared to the corresponding period of 2018 to $68.2 billion.

4) Saudi Aramco, which pumps 10% of global oil supply, will get listed on Riyadh stock market.

5) The company said it had hired a host of international banking giants including Citibank, Credit Suisse and HSBC as financial advisors and book-runners.

6) The prospectus said the state giant would sell up to 0.5% of its shares to individual retail investors but that it had still not decided on the percentage for larger institutional buyers.

7) In its push for transparency, Saudi Aramco's prospectus also highlighted risks including the potential for "terrorist" attacks and the possibility of antitrust legislation.

8) It also acknowledged that climate change concerns could reduce demand for hydrocarbons.

9) However key details were missing from the prospectus, including the company's valuation and how much Aramco expects to raise from the IPO.

10) Investment research firm Bernstein estimates the valuation could fall within a range of $1.2 and $1.5 trillion.

Based on a $1.5 trillion valuation, a two percent stake sale would raise Aramco $30 billion. That would still make it the world's biggest IPO, eclipsing Chinese retail giant Alibaba's $25 billion listing in 2014.

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