Saudi Aramco opened its second day of trading with a valuation of approximately $2.4trn, with shares valued at $10.32 (SAR 38.7) when the market opened. While price slightly dipped to $9.97 per share (SAR 37.4) as of writing, that still places the company's valuation firmly over $2trn.
"The IPO was widely criticised for falling short of the $2 trillion mark initially and limiting its offering principally to domestic and regional investors, initial price action has validated our thesis that Aramco discounted its IPO price to leave upside on the table and allow regional investors to benefit from the listing of its crown jewel, the world's most profitable company," said Zachary Cefaratti, CEO of Dalma Capital.
The company officially started trading on the local exchange (Tadawul) yesterday, with shares soaring to the daily 10% limit. Its IPO is the world's largest at $25.6bn, with shares sold at SAR 32 ($8.53), giving the company a valuation of $1.7trn before trading began.
Crown Prince Mohammed bin Salman first floated the idea of an IPO in 2016, claiming the company was worth $2trn, with the aim of raising $100bn in an international offering. It is the cornerstone of his economic diversification programme, and would give his primary investment vehicle, the Public Investment Fund, liquidity to invest into other programmes.
"The most meaningful aspect of this IPO is not the pricing, valuation, size of the deal or oversubscription - but that this has happened, and what that means for Saudi Arabia and the GCC," Cefaratti added. "Saudi Arabia opening the books of its crown jewel is an important step in diversifying and modernizing its economy. It marks a step towards a historic shift in Saudi Arabia going from principally being a source of oil and capital to becoming a source of investment opportunities in a modern, diversified economy."
Aramco's listing has made Tadawul, the Saudi exchange, the ninth-largest stock market; all of the other companies on Tadawul have a combined value of approximately $500bn, compared to Saudi Aramco's current valuation of over $2trn.