International Finance
Oil & Gas

FIIs account for only 10.5% of Aramco shares

Aramco institutional investors

Investments from foreign institutional investors in Aramco’s IPO accounts for 10.5 percent of the total oversubscribed shares. While a majority of the investment came from Saudi companies and funds.

Although foreign institutional investors accounted for only one-tenth of the shares on offer, institutional investors as a whole have put in bids worth $38 billion for Saudi Aramco’s planned IPO, oversubscribing it by more than two-fold, according to media reports.

Saudi Arabia’s state-owned oil behemoth Aramco, which is also the most profitable company in the world, has received subscription orders for around 4.6 billion shares so far, according to Samba Capital, NCB Capital, and HSBC Saudi Arabia.

The bidding process for institutional investors started on November 17 and will end on December 4, 2019.
Even though Aramco’s IPO has been oversubscribed, the number of subscriptions is relatively low compared to other IPOs.

Aramco’s much-anticipated IPO has failed to attract foreign investors to Aramco with oil giants such as Petronas and Norway’s $1 trillion Government Pension Fund Global deciding not to invest at all.

Aramco earlier announced that it will sell 1.5 percent of the company or about 3 billion shares on the Tadawul and raise around $25 billion. Saudi Arabia’s Crown Prince Mohammed Bin Salman was aiming for the coveted $2 trillion valuation for the oil behemoth, but now the kingdom has settled for a valuation somewhere between $1.6 trillion and $1.8 trillion.

Aramco also announced that 0.5 percent of the offering will be allocated to retail investors, while the remaining will be allotted to institutional investors.

Retail investors have also oversubscribed with orders reaching $10.2 billion, according to Samba Capital. Around 4.17 million retail investors subscribed to 1.19 billion Aramco shares as of November 28, 2019.

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