Aramco IPO expected to raise over $11 billion

Aramco, Saudi Arabia’s national oil company, is reportedly going to raise over $11.2 billion from its upcoming secondary public share offering.

The world largest oil company announced that it will price 1.545 billion shares at 27.25 Saudi riyal ($7.27) each.

It prices the Aramco share sale at the lower end of the initial marketing range which was seen between 26.70 and 29 Saudi riyals.

The proceeds are expected to unlock a large cash pile to support the Saudi government’s various high-cost infrastructure projects, often referred to as its "gigaprojects."

Global oil prices are currently under pressure amidst an uncertain demand outlook, despite the usual seasonal increase in gasoline consumption.

OPEC (the Organization of the Petroleum Exporting Countries), of which Saudi Arabia is the most influential member, recently extended both formal and voluntary supply cuts this month.

The share offering is believed to have seen stronger international demand, compared to Aramco's 2019 IPO, which raised $29.4 billion for the oil company.

Aramco's shares carry a substantial dividend yield, of 6.81%.

The Saudi government retains 82% of Aramco, while Saudi’s public investment fund owns 16%.

One of Saudi’s flagship ‘gigaprojects’ is the futuristic city of Neom, which is predicted to cost around $500 billion.