Oil giant Aramco opens door for investors
Oil giant Saudi Arabia’s Aramco is opening its door for investors to become part of the most profit-making company in the world. The bidding for shares in the company, wholly owned by the Saudi Kingdom, will start from November 17. However, it is holding back information about the number of shares it wants to sell and the price for the share.
As per the information available, we look at some. of the factors linked to this IPO.
1.Being the world’s most profit-making company, it is anticipated that Aramco will raise an amount of $30 billion through the sale of shares.
2.There is no clue in the prospectus about the face value of the share. However, it is expected that the face value would be announced on the day before the ending date of the subscription ie, December 5.
3.With a production capacity of 10 % of total oil production in the world, Aramco is considered as the top most company in terms of profitability in the world.
4.Subscription for this IPO is open from November 17 to 28.
5. Last year, the company posted a net profit of $111.1billion. However, in the current year there is a decrease in the profit that it is reduced by 18% compared to the period last year.
6. The company has listed its shares in Riyadh Stock Exchange.
7. Citi Bank, HSBC and Credit News are the firms entrusted with monitoring the process of the IPO and its proper implementation.
8. 0.5 % shares have been reserved for small scale investors, Moreover there is no indication that how much would be the volume of shares which would be offered to biggest players.
9. In order to make sure the transparency of the IPO, it is warned in the prospectus that the applicants should be aware of the threats from terrorists against the oil facilities.
10. It also gives warning that there may be less demand for hydro carbon in future due to climate change.
11.According to the assumption of the investment consultancy firm, Bernstein, Aramco is worth $1.2 to 1.5 trillion.
12. If the worth of the company is 1.5 trillion, there is every chance of it gathering around $30 billion and if so, it would be the biggest IPO overtaking the existing one by Chinese firm Alibaba which had gathered $25 billion in 2014.
Praveen Vikkath