Saudi Aramco, the world’s largest oil company, went public in 2019, through an initial public offering (IPO) on the Saudi Stock Exchange (Tadawul) as part of a larger economic reform plan called Vision 2030, led by the Saudi government. The main reason behind the IPO was to generate revenue for the Saudi government and to diversify the economy away from its reliance on oil exports. The proceeds from the IPO were intended to be used to fund a sovereign wealth fund, which would be used for infrastructure projects and to invest in other sectors of the economy.
The IPO also aimed to increase transparency and corporate governance within the company, in line with international standards. Additionally, it was also an opportunity for the company to raise capital for growth and expansion projects. The IPO also allowed foreign investors to buy shares in the company, which was not possible before and it also helped to increase the liquidity of the stock in the local market.
It’s worth noting that the IPO was done through a private placement of shares and was only available for qualified and institutional investors, not retail investors, and it was also subject to strict regulations by the Capital Market Authority (CMA) to protect the market from speculation and manipulation.
