Saudi Aramco IPO could create world's biggest listed company

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Meanwhile, Saudi Aramco will gain strong foothold in India as the country plans to lease one-quarter of its strategic petroleum reserves in Padur to Saudi Aramco.

Prince Mohammed (MBS) wants a $2 trillion price tag, but many bankers put it at $1.5 trillion.

Ellen Wald, author of "Saudi Inc." said that listing on the domestic market without any plans for an worldwide offering was risky because it could "completely overweight" the local market.

It remains to be seen whether Saudi Arabia is able to find "a compromise between the crown prince's stated preference and market realities in their valuation of Aramco", said Kristian Ulrichsen, a fellow at Rice University's Baker Institute in the United States.

Also, at a $1.5-trillion-valuation, Aramco "would still be worth at least 50 percent more than the world's most valuable companies, Microsoft and Apple, which each have a market capitalization of about $1 trillion", according to Al Jazeera.

"As the process has been delayed repeatedly and built up as such an integral component of the crown prince's plan to transform Saudi Arabia, global investors will pay very close attention to how Aramco performs on the domestic exchange", Ulrichsen told AFP.

Roadshows involving senior management will begin after the analysts' investor meetings the source said, adding pricing was likely to be announced around November 28.

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The world's most profitable company - owned by the Saudi government - will list on Riyadh's Stock Exchange, Tawadul.

Saudi Aramco's blockbuster listing remained shrouded in mystery on Monday, a day after the company finally announced its plans, with scant details disclosed and expert valuations varying wildly from around $1.2 to $2.3 trillion. The current record holder belongs to Chinese e-commerce giant Alibaba which raised $25 billion during its IPO in 2014.

The company's crude oil production accounted for approximately one in every eight barrels of crude oil produced globally from 2016-2018.

Dividends and their longevity are what is expected to draw investors to the Aramco IPO, scheduled for December. By contrast, Exxon Mobil's income for the period was just over $3 billion.

Furthermore, Saudi Aramco is possibly willing to augment the company's next year dividend by a further US$ 5 billion to entice investors.

A drone attack on its oil-processing facilities in eastern Saudi Arabia on September 14 halved the company's supply temporarily, crashing the global financial market, according to CNBC. "No one should borrow money to invest in the stock market".

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