Aramco takes unofficial IPO roadshow to Abu Dhabi

Listing witnesses positive and active participation rates; reaches SR21.77 billion in individual investors orders

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A billboard displaying an advert for Aramco is pictured in Riyadh on Nov. 11, 2019. — AFP

DUBAI — Saudi Aramco continued its unofficial regional roadshow with a visit to Abu Dhabi on Monday as the oil giant meets with investors to discuss its overall strategy, dividend plans, and company vision.

Aramco’s Chief Financial Officer Khalid Al-Dabbagh is leading the briefings to attract investors for its upcoming initial public offering (IPO) on the Saudi Stock Exchange (Tadawul).

The company’s executives first met investors in Dubai and are now continuing talks in the Emirati capital Abu Dhabi.

The Aramco IPO briefings in the UAE are meant to drum up support for the listing across the Arabian Gulf after the company abandoned plans for an international roadshow, saying in its updated IPO prospectus on Nov. 17 that the listing will focus on retail investors and qualified foreign investors (QFIs) in Saudi Arabia.

As an alternative, Saudi Aramco is targeting local and regional investors to garner support for the IPO.

Aramco is offering 1.5 percent of its shares on the Tadawul exchange. Retail investors will be able to subscribe to 0.5 percent of this amount, while the remaining 1 percent is allocated to institutional investors, such as banks or sovereign wealth funds.

The initial offering price for the IPO has been set at SR30-32 ($8-$8.53). This share price would value Aramco at $1.6 trillion to $1.7 trillion. The final price set to be announced on Dec. 5.

Saudi Aramco’s initial public offering (IPO) has reached SR21.77 billion ($5.8 billion) in individual investors orders so far, Samba Capital said on Monday.

Some 2.6 million individual subscribers have injected more than 21 billion riyals into the IPO for more than 680 million shares, Samba, one of the banks managing the IPO, said in a statement.

The rate of subscription through electronic channels reached 38.2%, followed by subscription through bank branches by about 35.1% then ATMs by 24.7% and telephone banking by 1.85%, Samba added.

Rania Nashar, Samba CEO said that the process of the IPO witnessed positive and active participation rates, supported by the confidence of citizens and individual investors in the investment value of the company.

Lending limits in the Kingdom were doubled for Saudi Arabian retail investors looking to invest in Aramco’s equity.

The Saudi Arabian Monetary Agency (SAMA), the Kingdom’s central bank, is also monitoring lending on a daily basis in order to ensure that regulations are met, and that local lenders are not over leveraging, another banker told Al Arabiya English.

Once listed, Aramco is expected to compose 9.1–9.7 percent of the Tadawul All Share Index (TASI), the Saudi benchmark index, based on the announced share price of SR30-32, according to Riyadh-based Al Rajhi Capital.

Meanwhile, on Sunday, Khalid Al-Hussan, chief executive officer of the Tadawul exchange, told local media that the oil giant’s weight on the index is “unlikely” to breach the maximum limit set by the market, adding that the maximum level that the company can reach is 15 percent. — Al-Arabiya English/SG


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