Saudi Arabia is all set for the world's biggest IPO: Here are the vital stats
NEW DELHI: Saudi Arabia is going to break a Chinese record. Alibaba Group Holding Ltd, a Chinese Internet retailer, raised $25 billion in 2014, which made it the biggest IPO of the world. Saudi Aramco, the state-owned oil company of Saudi Arabia, is preparing for an IPO next year that would beat Alibaba's record.
Below are the key points of the world's biggest market event:
1. The size
Saudi Arabia is aiming to sell 5 per cent of Saudi Aramco. The share sale would be worth $100 billion, four times the world's biggest IPO of Alibaba. The share sale will value the company at $2 trillion. It will be far bigger than any of the biggest listed companies such as Apple, Berkshire Hathaway, Facebook, ExxonMobil and JPMorgan Chase. It will be bigger than the two biggest listed companies in the world—Apple and Alphabet, Google's holding company—put togther.
2. The listing
Saudi Aramco will list at Saudi Arabia’s domestic stock exchange, Tadawul. Since it will be too big for the local exchange, it is expected to be listed at one more exchange. This has kicked off a race among global exchanges. Hong Kong, Singapore, New York, Toronto, London and Tokyo are in the race. The company may not list at the New York Stock Exchange even if it wants due to regulations that would require it to declare its oil reserves which Saudi Arabia considers a state secret.
3. What will Saudi Arabia do with $100 billion?
For quite some time, Saudi Arabia is trying to diversify its economy to reduce dependence on oil. The money raised from the Saudi Aramco IPO will go into a public investment fund which aims at diversifying the economy. The money will drive a plan called Vision 2030, which calls for development of non-oil industries and broadbasing investment.
4. Will it impact oil prices?
Yes, it might, as Saudi Arabia would like the oil prices to go up for higher valuation. Higher oil prices will raise the price of Aramco shares.
Below are the key points of the world's biggest market event:
1. The size
Saudi Arabia is aiming to sell 5 per cent of Saudi Aramco. The share sale would be worth $100 billion, four times the world's biggest IPO of Alibaba. The share sale will value the company at $2 trillion. It will be far bigger than any of the biggest listed companies such as Apple, Berkshire Hathaway, Facebook, ExxonMobil and JPMorgan Chase. It will be bigger than the two biggest listed companies in the world—Apple and Alphabet, Google's holding company—put togther.
2. The listing
Saudi Aramco will list at Saudi Arabia’s domestic stock exchange, Tadawul. Since it will be too big for the local exchange, it is expected to be listed at one more exchange. This has kicked off a race among global exchanges. Hong Kong, Singapore, New York, Toronto, London and Tokyo are in the race. The company may not list at the New York Stock Exchange even if it wants due to regulations that would require it to declare its oil reserves which Saudi Arabia considers a state secret.
3. What will Saudi Arabia do with $100 billion?
For quite some time, Saudi Arabia is trying to diversify its economy to reduce dependence on oil. The money raised from the Saudi Aramco IPO will go into a public investment fund which aims at diversifying the economy. The money will drive a plan called Vision 2030, which calls for development of non-oil industries and broadbasing investment.
4. Will it impact oil prices?
Yes, it might, as Saudi Arabia would like the oil prices to go up for higher valuation. Higher oil prices will raise the price of Aramco shares.
