Aramco Sets IPO Record With $2 Trillion Valuation

Aramco's long-anticipated IPO succeeds at last.

Shares in Saudi Aramco rose beyond the 10% limit in their debut on the Saudi stock exchange in December and climbed further on their second day of trading, reaching the $2 trillion valuation long sought by Crown Prince Mohamed bin Salman.

The listing of a 1.5% stake in the national oil and gas company raised a record $25.6 billion, the largest ever for an initial public offering, surpassing the $25 billion raised by Alibaba in 2014.

The listing was far below the $100 billion IPO initially discussed in 2016, when the kingdom was looking to sell a 5% share of the company in a dual foreign and domestic offering. Nonetheless, Saudi Aramco became the most valuable company in the world, ahead of Apple.

The oil company’s inclusion in the MSCI Index was expected to draw in inflows from international investors of more than $700 million. The index serves as a passive investment vehicle for index funds.

A poll of 31 global investors by Bernstein Research ahead of the listing found that they placed a mean valuation on Aramco of $1.26 trillion, reflecting concerns about the company’s governance and earnings potential.