Saudi Aramco launches IPO, to become world's most valued company; Apple, Microsoft, Amazon far behind

Saudi Aramco will become the world's most valuable public listed company, leaving the likes of US tech giants Apple, Microsoft and Amazon way behind

  • Updated
Saudi Arabia petrol station
Saudi Arabia petrol station Pixabay

Saudi Aramco, Saudi Arabia's state-owned oil company, started its IPO on Sunday, thus announcing its plans to go public. The much-awaited IPO that was getting delayed for quite some time over the oil giant's ability to raise the $2 trillion valuation by the crown prince Mohammed bin Salman, finally took off on Sunday. This will make Saudi Aramco the world's most valuable public listed company, leaving the likes of US tech giants Apple, Microsoft and Amazon way behind.

On Sunday, the Capital Market Authority said that it has approved Aramco's IPO, following which the company will now release the prospectus for its IPO on November 10. It has been Salman's three-year long dream to become a public traded company. Trading is expected to begin next month although no specified date has been announced. Bankers have told Saudi Arabia's government officials that investors are likely to value the company at around $1.5 trillion.

Saudi Aramco, considered to be the country's jewel, will sell a portion of its shares on the Saudi stock exchange, Tadwul. It has been Mohammad bin Salman's long dream to overhaul Saudi Arabia's oil-driven economy and reshape the country. Also, it is expected to be the world's biggest IPO, with Riyadh alone likely to raise as much as $60 billion.

Saudi Arabian Crown Prince, Mohammad bin Salman
Saudi Arabian Crown Prince, Mohammad bin Salman Reuters

The most talked-about IPOs in recent times have been that of Chinese ecommerce giant Alibaba's, when it launched the world's largest IPO in 2014, raising $22 billion. Saudi Aramco is the most profit making company in the world and registered $111 billion in net income last year. Aramco, however, did not confirm how much of the company it will sell, although it announced the IPO would be split into two tranches: one each for institutional and individual investors.

Apple, Microsoft, Amazon lag

Earlier this month Apple surpassed Microsoft to regain its position as the most valuable public listed company in the world. Apple, in fact, became the first company in the world to touch a market capital of $1 trillion in 2018. Less than a month after Apple reaching this feat, Amazon too crossed $1 trillion in market capital. Microsoft was the next to follow and since then there has been a constant shift in positions among these three tech giants.

Moreover, the war was so far limited to the US market. However, with Saudi Aramco now having gone for an IPO the scene changes completely. Although analysts say that despite expectations Saudi Aramco might not be able to raise $2 trillion but hover somewhere around $1.5 trillion, it still will be far ahead of any public listed company in terms of market capital.

This article was first published on November 4, 2019