Saudi Aramco clocks $1.7 trillion market valuation after blockbuster IPO

Saudi Aramco is now the world's most valuable company with a market valuation of $1.7 trillion after its initial public offering (IPO) raised $25.6 billion. The company has comfortably overtaken Apple.

Aramco priced its IPO at 32 riyals ($8.53) per share, the top of its indicative range, raising $25.6 billion and beating Alibaba's record $25 billion-listing in 2014. Alibaba's listing was on NYSE. 

The company may further increase the size of the deal to a maximum of $29.4 billion by exercising a 15 percent "greenshoe" option, Reuters quoted sources say.

(Greenshoe option

A greenshoe option is an over-allotment optional. In the context of an initial public offering (IPO), it is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than initially planned by the issuer if the demand for a security issue proves higher than expected.

The initial plan was to sell a 5 percent stake to raise as much as $100 billion via international and domestic listings.) 

However, even at a $1.7 trillion valuation, climate change concerns, political risk and a lack of corporate transparency put international institutions off the offering. Saudi Arabia thus sold 1.5 percent stake to domestic and regional investors and offered citizens cheap credit to bid for shares.

The pricing comes as the Organisation of the Petroleum Exporting Countries (OPEC) is gearing up to deepen oil supply cuts to support prices, provided it can strike a deal later this week with allies such as Russia.