Saudi Arabia set to raise over $11.2 billion from Aramco stock sale, priced at lower end of range

• Saudi Aramco on Friday said it will price the 1.545 billion shares on sale as part of its secondary offering at 27.25 Saudi riyal ($7.27) piece.
• The pricing is toward the bottom end of a range between 26.70 and 29 Saudi riyals per share that was floated in the firm’s initial marketing.
• The proceeds of the latest share sale will provide much-needed relief to the Saudi government, which is currently financing a slew of high-cost infrastructure “gigaprojects.”

Saudi Arabia is set to raise over $11.2 billion from a secondary public share offering in state-controlled oil giant Aramco, pricing 1.545 billion shares at 27.25 Saudi riyals ($7.27) each, near the lower end of the expected range. The sale, occurring Sunday, is priced 4% below the last settlement on the Tadāwul exchange.

Aramco shares have dropped over 2% since the secondary offering announcement on May 30, as investors often expect discounts with new share issues. Despite global oil price pressures and the energy transition, the offering saw strong demand, reportedly covered four to five times, surpassing interest from Aramco’s 2019 IPO.

Aramco, a key player in Riyadh’s economy, offers attractive dividends, with a 6.81% yield compared to Exxon Mobil’s 3.33% and Chevron’s 4.18%. Major shareholders include the Saudi government (82%) and the Public Investment Fund (16%).

Proceeds will support Saudi Arabia’s Vision 2030 projects, including the $500 billion Neom city, aimed at diversifying the economy away from oil dependency. The kingdom also recently raised $12 billion through a bond sale to finance these initiatives.