Saudi Arabia’s sale of shares in its state-owned oil giant Aramco has generated significant investor demand, with books covered on the full deal size within the offered price range. The share sale could raise up to $13.1 billion, which would be a major test of international appetite for Saudi assets.
The offering, which kicked off on Sunday, will see the Saudi government sell around 1.545 billion Aramco shares, or 0.64% of the company, at a price range of 26.7 to 29 riyals per share. If all the shares are sold, the Saudi government will be cutting its stake in the world’s top oil exporter by 0.7%.
The deal has attracted a strong response from institutional investors, with demand exceeding the stock on offer within hours of the launch. The banks managing the sale can also increase the offering by a further roughly $1 billion.
The share sale is seen as a gauge of Riyadh’s appeal to foreign investors, which is a key part of the kingdom’s plan to overhaul its economy and reduce its reliance on oil. The funds raised are likely to benefit the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, which is driving the country’s ambitious economic transformation agenda.
Aramco’s shares closed about 2% lower on Sunday at 28.45 riyals ($7.53) per share. The banks on the deal will take institutional orders through Thursday and will price the shares the following day, with trading expected to start next Sunday on the Saudi Exchange.
The Aramco share sale comes as OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) agreed to extend most of its deep oil output cuts well into 2025. This move is aimed at shoring up the oil market amid tepid global demand growth, high interest rates, and rising rival U.S. production.