Proposed listing to be world’s largest ever IPO

State-run oil company Saudi Aramco has announced its intention to progress with its planned public listing on the Riyadh stock exchange, expected to be the world’s largest ever IPO.

“Saudi Aramco, the world’s largest integrated oil and gas company, wholly owned by the Government of the Kingdom of Saudi Arabia, today announces its intention to proceed with an initial public offering on the Main Market of Tadawul,” the firm said in a statement Sunday.

The planned IPO has been years in the making and faced many false starts with markets sceptical over the valuation and the tight state-control of the organisation, married with political challenges.

“Investing in Aramco carries risks, of course, and not only that oil prices will struggle to move higher,” Chris Beauchamp, chief market analyst at derivatives traders IG Group, commented.

“Political and strategic risks are high for any firm operating in the region, not least one which is an arm of the Saudi state. Aramco also has limited control in output policy, a key part of Saudi Arabia’s Opec management.”

Markets expect Saudis to make shares available for only 1% or 2% of the firm, and the offer will be for existing company shares. Saudi Aramco hopes the IPO will realise a valuation of US$1.2 trillion