Aramco IPO Valuation: The Devil Is In The Detail

Saudi Aramco, with its 12mn b/d production, is the world’s largest oil company. But how big? Its value has been intensly debated since IPO plans were unveiled in April 2016. Estimates have diverged widely. But until decisions are reached on key aspects of the floatation, the firm’s ultimate value remains anyone’s guess.

Ever since the plans for listing a 5% stake of prized state oil giant Saudi Aramco were announced last year, it has repeatedly been heralded as the soon-to-be world’s largest IPO.

Slated for issuance in late-2018, Saudi Arabia’s Deputy Crown Prince Muhammad bin Salman, who is the key driver behind the much-vaunted Vision 2030 economic diversification plan, has estimated Aramco’s value at $2 trillion.

This means its IPO would raise around $100bn, dwarfing the $25bn secured by Chinese internet retailer Alibaba in the world’s largest IPO in 2014.

Furthermore, at $2 trillion, Aramco would immediately become the world’s largest quoted company, not just taking a bite out of current number one Apple, but swallowing up its $800bn valuation more than twice over. (CONTINUED - 2302 WORDS)