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Saudi Aramco’s latest $12 billion stock offering was fully subscribed within hours, showcasing strong demand from both local and foreign investors. The order books quickly filled within the price range of 26.70 riyals to 29 riyals per share.
While specific details on the proportion of foreign investment remain unclear, sources familiar with the matter confirmed a diverse mix of buyers. The level of international participation is particularly significant, as it serves as an indicator of global interest in Saudi assets. During Aramco’s 2019 IPO, only about 23% of shares were allocated to foreign buyers, with the majority purchased by local investors.
One of the main attractions of the current offering is Aramco’s substantial dividend yield. Bloomberg Intelligence estimates that investors stand to benefit from a $124 billion annual payout, translating to a 6.6% dividend yield. This enticing return may offset concerns about the company’s valuation and the absence of share buybacks.
The announcement coincides with an OPEC+ meeting where members agreed to extend production cuts into 2025, while easing some restrictions later this year. This decision is expected to allow Saudi Arabia to adjust output limitations on Aramco, potentially boosting the company’s future production capacity.
Despite the positive reception of the stock offer, Aramco shares fell 1.9% on Sunday, valuing the company at approximately $1.8 trillion. The stock has declined about 14% since the start of the year, reflecting market reactions to the government’s plan to sell a stake in the company. Currently, Aramco shares are trading at their lowest levels in over a year.
The Saudi government remains the dominant shareholder, owning about 82% of Aramco, with the kingdom’s wealth fund holding an additional 16% stake. Crown Prince Mohammed bin Salman has indicated future plans to sell more Aramco shares, with momentum for these plans increasing over the past year.
