Missed Saudi Aramco IPO? Here’s how you can invest in global marquee public issues

Saudi Arabia’s state-owned company said it would set a price range for the shares on 17 November, but the final price will only be determined on 5 December.

• Amit Gupta

The retail portion of Saudi Aramco IPO closed for subscription yesterday. It received very strong demand, and as orders reached a whopping 38.1 billion Saudi riyals ($10.2 billion), lead manager Samba Capital said on November 28. The Saudi-based state-owned oil giant plans to sell 1.5% of the company, or about 3 billion shares, at an indicative price range of 30 riyals to 32 riyals, valuing the IPO at as much as 96 billion riyals ($25.6 billion) and giving the company a market value of between $1.6 trillion and $1.7 trillion. While many investors may have  missed out on the issue, we take a look at the process to invest in marquee global IPOs for Indian investors.

About Saudi Aramco IPO

The world’s biggest public float, the initial public offer (IPO) of Saudi Aramco opened on November 17 with the final share price being determined on December 5 – a day after the issue closes for institutional investors. Individual investors, however, will only be able to apply till November 28. Saudi Arabia’s state-owned company said it would set a price range for the shares on 17 November, but the final price will only be determined on 5 December, the day after all subscriptions close. Importantly, Saudi Aramco said it would sell an unspecified number of shares on just its local stock exchange Tadawul, and not in Western markets such as the New York Stock Exchange or the London Stock Exchange.

How Indian Investor can Apply?

At present, Indians are allowed to remit up to $250,000 per financial year to other countries under the Liberalised Remittance Scheme (LRS). These funds amount can be used for specific current account or capital account transactions, which include making equity and debt investment abroad. The scheme is, however, not available to corporates, partnership firms, HUF (Hindu Undivided Family), Trusts, etc. This scheme enables Indian retail investors to access overseas equity markets.

All you need to do is tie up with a foreign broker who can make a transaction on your behalf or route your trades via domestic brokers who have a tie-up with foreign brokers. However, the domestic broking houses mostly have tie-ups with US-based foreign brokers. So it might be difficult to find a brokerage firm in India which has a tie-up with brokerages in Saudi Arabia. However, one can invest through professional wealth managers. Fund houses such as Morningstar, Edelweiss, Invesco Mutual Fund, DSP, ICICI Prudential Mutual Fund, Parag Parikh Financial Advisory (PPFAS) and Franklin Templeton offer products that help Indian investors take exposure to global equities.

(The author is Amit Gupta, Co-Founder and  CEO, TradingBells. Views expressed are author’s own. Kindly consult your financial advisor before taking any investment decision)