Aramco will offer 0.5% of shares to individual investors in IPO

Aramco will offer below one percent of shares to individual investors in IPO

Saudi Aramco will sell over 0.5 percent of its shares to individual investors in what might known as the major IPO in history. The biggest oil company of the world released a prospectus Saturday, giving more information but without disclosing the exact size of its planned share offering. Saudi Aramco said the process starts on November 17 and closes on December 4. A closing offer price, as well as the percentage and number of the firm shares that would sell, will determine at the end of that duration. The catalog says individual investors will have to request shares until November 28, nothing that over 0.5 percent of the firm’s shares will allocate to individual investors.

Saudi Aramco long-established plans to pay yearly, total cash dividends of minimum 75 billion dollars starting in 2020, along with any special dividends. Whereas, investors cannot yet calculate the worth of those dividends yield as compared to other firms until they can easily assess the assessment of Saudi Aramco and its shares. Investors of dividend are paying attention to steady returns; therefore, they try to put their investment into stocks with the best yields. Shares of Exxon Mobil have a dividend yield of about 4.92%, depends on their Friday closing price of around $70.77 per share. The yield of Chevron stands at around 3.94%, depends on their closing price of Friday of $70.77 each share. Yield of Chevron stands at around 3.94% and comes in at about 6.28%.

Writers of Saudi Aramco IPO

The government of Saudi Arabia will face a lockup duration of six months on more sales of shares after the public offering of Aramco. J.P. Morgan, Morgan Stanley, Citigroup, and Goldman Sachs, as well as some others, wrote the IPO. Last week Aramco said that it plans to float its shares in December on the Stock Exchange of Kingdom, recognized as the Tadawul.

Valuations of the analysts of the firm varied from about $1.2 trillion to around $2.3 trillion. Whereas in comparison, the closet United States rival of Aramco, Exxon Mobil, has a market cap of almost $300 billion, and Chevron valued at around $229 billion. The much-expected IPO primary flagged in 2016 by the Saudi government, and faced several delays, allegedly amid worries its finances would openly scrutinize. Also, the drone attacks on its main oil facilities in this September raised concerns about security and threatened to risk its planned listing.

Saudi Aramco warned that armed disputes and terrorism could significantly affect the market price of its shares. Amin Nasser, the CEO and President of Aramco, said last week that the public debut of the company would help expand the economy of the Kingdom. Furthermore, the step might also strengthen the stock exchange of Saudi Arabia by drawing local as well as international investment.

Read Also: Why Analysts still Cautious about IPO of Saudi Arabia


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