Institutional bids for Aramco IPO hit $38.4bn

Institutional demand for Saudi Aramco's initial public offering reached 144.15 billion Saudi riyals (Dh141.18bn), during the first 15 days of book-building, according to lead arrangers Samba Capital, NCB Capital and HSBC Saudi Arabia.

Institutional investors subscribed for 4,551,643,566 shares, the banks said in a note.

Saudi Aramco, which accounts for one in every eight barrel of oil produced is floating 1.5 per cent of its shares, of which two-thirds are offered to institutional investors. Based on a price range of 30-32 riyals per share, the company is valued at between $1.6 trillion and $1.7tn (Dh5.9tn-Dh6.2tn). Saudi Aramco's book-building continues until 5pm Saudi time on Wednesday.

Retail subscriptions for the IPO closed on Friday, reaching 47 billion riyals or 1,481,613,280 shares. Retail and institutional bids now stand at about 191.5bn riyals, which is virtually double the 96 billion riyals that would be raised if a float took place at 32 riyals per share.

The oil giant is expected to start trading on Tadawul next week. The Saudi stock exchange—largest in the Arab world—issued new market index rules on Monday, limiting the influence of any one firm over the benchmark.

The measures include the introduction of a 15 per cent threshold "to reduce dominance of larger companies on the index performance" Tadawul said in a statement.

Saudi Aramco is estimated to take up a share of 9.1 per cent to 9.7 per cent of the Tadawul All-Share index attracting 3.7bn riyals of passive flows from funds tracking MSCI and FTSE Russell indexes following the listing, according to estimates from Al Rajhi Bank.

Updated: December 2, 2019 05:15 PM