Saudi Aramco has set a price range for its listing, implying that the oil giant has a value between $ 1.6 trillion and $ 1.7 trillion, which is less than $ 2 trillion that the saudi Arabian Crown Prince, but still making it the largest potential IPO in the world
Aramco announced on Sunday 1.5 percent of its shares or about three billion shares at an indicative price of between Riyal ($ 8.00) and 32 Riyal ($ 8.53) to sell billion Riyal ($ 25.60 billion) at the upper end of the range.
At a top price, the deal could surpass the record $ 25 billion of Chinese e-commerce giant Alibaba's market launch in New York in 2014.
Aramco's float is at the heart of Kronprinz's plan Mohammed bin Salman to separate the world's best crude oil exporter.
Aramco does not plan this marketing its domestic IPO overseas, three people familiar with the matter said, suggesting that international roadshows will not take place.
"This will put the burden of the deal on local and regional banks," said one of the three people.
"This means that most investors will participate as qualified foreign investors in a Saudi transaction," said another.
After a series of false starts, Aramco finally launched his IPO on November 3. Crown Prince Mohammed, who launched the idea of stock market listing four years ago, wants to raise billions of dollars through the deal to invest in non-oil industries and create jobs the famous, mysterious company is worth. Bank analysts working on the Riyadh market forecast a broad valuation range for Aramco of $ 1
On the one hand, with a planned $ 75 billion dividend next year, Aramco is the world's most profitable company, five times higher than Apple's payout, which is already the largest of all S & P 500 companies.
On the other hand, it is betting on the price of oil at a time when global demand is expected to slow down from 2025 onwards, to take measures to reduce greenhouse gas emissions and to increase the use of electric vehicles.
The deal also carries political risks as the Saudi government – which makes most of its funding dependent on Aramco – will continue to control the company. Prince Mohammed's reputation was tarnished by the assassination of Saudi journalist Jamal Khashoggi last year.
In addition, Aramco's oil factories were attacked on September 14 in attacks that halved their production. The company said the strike would have no significant impact on its business.
Stock sales are expected to be a huge success for Saudi citizens, who are offered 0.5 percent of the company.
Al Jazeera's Business Editor, According to Abid Ali, many of the country's billionaires, some of whom were arrested by Saudi authorities at Riads Hotel Ritz Carlton for corruption in 2017, are also likely to be big investors when the shares are sold.
"On the day the shares are sold, the Saudi pension funds, mutual funds, will pick up the remaining shares," said Ali.
But, he says, international investors are keeping aloof.
"There are several ways to assess Saudi Aramco: The price of oil, free cash flow and dividends are used and most of these measures are math Many international investors did not feel like being in a car owned by the Saudi authorities is driven to be a passenger, "he added.
Private investors must register for IPOs by November 28, while institutional investors can subscribe by December 4, as corporate executives conduct marketing marketing roadshows this week.
Aramco's listing is an end-to-end stock market rush as Alibaba is currently accepting orders for a listing in Hong Kong, which is expected to rise to $ 13.4 billion for the online retailer.
The listing in Riyadh follows after initial hopes of a five-percent IPO on domestic and international stock exchanges last year were dashed given the overvalued debate and the question of where Aramco should be listed overseas.
Aramco said the IPO has been postponed as it acquires a 70 percent stake in petrochemical maker Saudi Basic Industries Corp. was started.
Al Jazeera and news agencies