We explain that Gulf countries ‘ NRIs or Saudi Aramco IPO can comfortably invest in Indian markets. But people who want to invest in them do not like that.
On Sunday, November 17, in what is considered as the biggest public concern globally, Saudi Aramco announced plans to be made public. Aramco is projected to become by market value, well beyond Apple, Microsoft and Amazon.com, the world’s biggest business.
Saudi Aramco, the largest fully-owned oil & gas company in the world, has, however, announced its plan to seek an initial public offer on the Tadawul High Main Market, the central bursary, and not on the western markets like the New York Stock Exchange or the London Stock Exchange.
On 17 November the company is expected to announce the price range and on 11 December the stock listing.
According to international media, Aramco could collect up to $20-40 billion. The estimated IPO of Chinese business company Alibaba on the New York Börse in 2014 would be above 25 billion USD.
That’s how Indians will vote in the world’s largest Saudi Aramco IPO
On November 3, the government-owned oil giant Saudi Aramco announced it would float its IPO on the stock market in Riyadh. It’s more than three years since Crown Prince Mohammed bin Salman first asked the world’s largest oil producer to trade.
Aramco would rely mainly on local demand, with one quarter reserved for retail investors in Saudi Arabia. They could sell 1-2% of local stock to collect up to 20-40 billion dollars.
The company has been targeting a valuation of $2 trillion since 2016-more than twice as much as Apple. Monday, Aramco was estimated at between $1.6 trillion and $1.71 trillion by Saudi Arabia.
The firm will sell 1.5% to $24 billion to $25.6 billion in a new blockbuster public offering. The estimated $25 billion from the New York launch in 2014–now the world’s largest IPO–may surpass the Chinese e-commerce firm Alibaba.
The world’s largest first public offer for institutional investors was made available on 17 November and is open until 4 December. The problem will begin on 28 November for retail investors. You can still participate in the IPO as an Indian citizen.
Failure to win foreign money makes the local event of Saudi Aramco IPO
Two years ago, when Saudi oil giant Aramco’s initial public offering kept foreign investors in anticipation, President Donald Trump felt obliged to make a campaign official to buy shares in America.
Trump tweeted in November 2017, “Does Saudi Arabia enjoy very much doing its Aramco IPO with the New York stock exchange.
Today, Saudi Aramco is shunning the IPO not only for the US, American, European or Japanese stakeholders but also for other foreign markets. It is the first location to be opened in NYC today. Actually, Aramco plans to make a heavy dependence on ultra-rich Saudis, many of whom were encouraged to invest. In order to allow the locals to buy more shares, Saudi banks relax lender regulations.
The IPO was once marketed as Saudi Arabia’s greatest symbol of economic change: the transaction that brought tens of billions of foreign capital to the Kingdom. Instead, it is beginning to be more like a levy on the economy as large and small Saudi investors take over from the foreign money managers.
It is undoubtedly still the world’s largest IPO, maybe growing to about $25 trillion or $1.7 trillion, well over Silicon Valley’s biggest names. Nevertheless, the Saudi Crown Prince Mohammed bin Salman said he planned to raise less than $100 billion when he initially suggested the IPO in 2016. He set estimation of a total of $2 trillion at that time.
Ayham Kamel, head of Middle East practice for the Eurasia Group consulting firm, says, “Saudi Arabia is pushing the IPO to concentrate more on local investors for a while.” “Given the valuation and the geopolitical risk, west demand was going to be timid.
Saudi Aramco IPO is hard-selling by explosions & flooding
It’s a bad time for a petroleum industry with its main asset being land reserves that can maintain current carbon-laden fossil fuel production levels until around the end of the century.
After the disruptions generated by petroleum in the 1970s, oil has lost its position on the energy market. It has now started to see serious competition for powered vehicles, buses, and trucks as well as the first signs of competitive marine transport alternatives. The oil hegemony in air transport now seems healthier, and petrochemical goods that cover everything from chemicals, fertilizers to electronic gadgets and clothes are expected to develop at the highest level. Yet history’s ocean is steadily moving toward fossil fuels.
Saudi Aramco can boast of having the right to the highest oil reserves with the lowest carbon footprint, but it does not. The environmental issues surrounding fuels do not apply to coal emissions, nor to what is achieved later.
The oil era is not over, but it is faced with unparalleled head-winds. Here is an example from the last weeks and months: Mayor Luigi Brugnaro of Venice said last week that the ancient seaside town, which has had its second-highest tide, is faced with climate change. In part in Northern Britain, millions were affected as the cyclone reached Bangladesh and northern India and experienced their worst flood of years.
Storms and flooding are not recent but are increasingly more often as the sea level is rising and changes in climate are causing more harm— developments that are at least in part related to the burning of fossil fuels.
Unprecedented bush fires have left tinderboxes dry for two years, ravaging parts of eastern Australia. Earlier this month, wildfires caused hundreds of thousands of Californians to evacuate. One of Russia’s deadliest years for forest fires in this century. Climate change again helps create the warm, dry conditions that have made fires spread.