Saudi Aramco IPO to be announced today

Today, Saudi Arabia will announce a public offering by Saudi Aramco on the Kingdom’s Tadawul market. It is expected that the transaction price will be released on November 17 and trading will start on December 11.

Crown Prince Mohammed bin Salman (MbS) is set on Saudi Aramco, which meets 10% of the world’s oil demand, gaining a $2 trillion valuation. This means floating a 1%-2% stake, so that it gains $20 billion—one of the largest initial public offerings (IPO) in history. As Saudi Aramco will offer a base dividend of $75 billion, a $2 trillion valuation would give a 3.75% dividend yield.

This profit would mean MbS could extract the $100 billion he needs to fund his Vision 2030 development plans. However, as oil prices weaken and countries transition more onto sustainable energy, other advisers see a $1.5 trillion valuation as more realistic.

With MbS set on diversifying the economy by using the profits from the IPO to stimulate manufacturing, expect Saudi Aramco to move to listing 5% of its shares on the international market in the medium-term.