$1.7 Tn Worth Saudi Aramco Launches World’s Biggest IPO: How Can Indians Invest In This Blockbuster IPO?

$1.7 Tn Worth Saudi Aramco Launches World's Biggest IPO: How Can Indians Invest In This Blockbuster IPO?
$1.7 Tn Worth Saudi Aramco Launches World’s Biggest IPO: How Can Indians Invest In This Blockbuster IPO?

On 3 Nov, the state-owned oil giant Saudi Aramco announced that it will be trading its IPO on the Riyadh stock market. 

Saudi Aramco IPO: A Brief History

It’s almost more than three years when Crown Prince Mohammed bin Salman first presented the idea to offer shares in the world’s largest oil producer.

They decided that Aramco will mainly present this offering to the local  investors in the country. Which translates to one third of the offering is reserved for Saudi retail investors

They decided to offer 1-2% of its shares on the local stock market and expected to raise around $20-40 billion.

As per the reports, since 2016, the company is targeting a $2 trillion valuation, which is  more than twice that of the well known company Apple

With the latest updates, Saudi Arabia put a valuation on Aramco of between $1.6 trillion and $1.71 trillion on Sunday.

According to Saudi Aramco, They are planning to sell 1.5 percent of the company in a blockbuster initial public offering worth between $24 billion and $25.6 billion. 

With this latest announcement, the company could beat Chinese e-commerce giant Alibaba’s record $25 billion New York stock market debut in 2014 which is currently referred to as the world’s largest IPO.

On 17 November, the world’s biggest initial public offer opened for institutional investors and will be kept open for subscription for the full week until 4 December.

How Indian Can Buy This IPO?

While the issue will open on November 28 for retail investors. The best part is being an Indian citizen, people can still invest in this IPO.

The Saudi Aramco opens on November 17 with the final share price being determined on 5 December, which is a day after the issue closes for institutional investors. 

Individual investors, however, will only be able to apply till November 28.

  1. First way is to use the government’s Liberalised Remittance Scheme (LRS). According to this, domestic investors are allowed to remit US $250,000 during a financial year to another country, which ultimately can be used to buy stocks and debt instruments in overseas markets.
  2. Although, the experts suggests to invest through professional wealth managers. For example fund houses such as Morningstar, Edelweiss, Invesco Mutual Fund, DSP, ICICI Prudential Mutual Fund, Parag Parikh Financial Advisory (PPFAS) and Franklin Templeton offer products that help Indian investors take exposure to global equities. for instance, PPFAS, already has foreign companies such as Google, Alphabet, Amazon and IBM in their portfolio.
  3. According to G Chokkalingam, the founder and managing director at Equinomics Research advised “LRS is one way of going about it. The best thing, however, would be to go through wealth management companies or institutional brokers that have first-hand knowledge of investing abroad,”. (reference BS)

As there are multiple ways to invest in this offering but one should go for a through market analysis before making any investments.

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