INSUBCONTINENT EXCLUSIVE:
Saudi Arabia had been pulling out all the stops to ensure the IPO is a success.Saudi Aramco raised $25.6 billion from the world's biggest
initial public offering, closing a deal that became synonymous with the kingdom's controversial crown prince and his plans to reshape the
nation.The state-owned oil giant set the final price of its shares at 32 riyals ($8.53), valuing the world's most profitable company at $1.7
It received total bids of $119 billion.For Crown Prince Mohammed Bin Salman, the sale could help restore credibility undermined by setbacks
to his blueprint to overhaul the economy and a global reputation tarnished by the murder of Washington Post columnist Jamal Khashoggi and
the war in Yemen.But the deal ended up being very different from what the prince had envisaged when he first floated the idea in 2016 with
an ambition to raise as much as $100 billion
company at $2 trillion.Instead, Aramco relied heavily on local investors and funds from neighboring Gulf Arab monarchies
In the offering for individuals, almost 5 million people applied for shares
The institutional tranche closed on Wednesday and attracted bids totaling 397 billion riyals.The kingdom's richest families, some of whom
had members detained in Riyadh's Ritz-Carlton hotel during a so-called corruption crackdown in 2017, are expected to have made significant
Global banks working on the deal were sidelined after Saudi Arabia decided to focus on selling the shares to local and regional
investors.Still, Aramco will become the world's most valuable publicly traded company once it starts trading, overtaking Microsoft and
Apple.The deal opens up one of the world's most secretive companies, whose profits helped bankroll the kingdom and its ruling family for
decades, to investors and Saudi individuals
Until this year, Aramco had never published financial statements or borrowed in international debt markets.It will also mean the company now
has shareholders other than the Saudi government for the first time since it was nationalized in the late 1970s.Saudi Arabia had been
pulling out all the stops to ensure the IPO is a success
It cut the tax rate for Aramco three times, promised the world's largest dividend and offered bonus shares for retail investors who keep
hold of the stock.Goldman Sachs, acting as share stabilizing manager, has the right to exercise a so-called greenshoe option of 450 million
The purchase option can be executed in whole or in part at any time on or before 30 calendar days after the trading debut
It could raise the IPO proceeds to $29.4 billion.Funds from the sale will be transferred to the Public Investment Fund, which has been
making a number of bold investments, plowing $45 billion into SoftBank Corp.'s Vision Fund, taking a $3.5 billion stake in Uber and planning
a $500 billion futuristic city.The sale is the first major disposal of state assets since Prince Mohammed launched a much-touted plan to
reduce the economy's addiction to oil revenue in 2016.The last major government privatization, the 2014 IPO of National Commercial Bank,
received $83 billion in subscriptions from investors.(Except for the headline, this story has not been edited by TheIndianSubcontinent staff
and is published from a syndicated feed.)
