Saudi Aramco pulls down India’s rank in market cap league table

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Published: December 12, 2019 2:26:12 AM

The oil company raised a record $25.6 billion from an initial public offering (IPO) in what so called the biggest-ever IPO by offloading shares at 32 riyals each, which valued the company at $1.7 trillion.

Aramco, oil company, Exxon Mobil, Total, Royal Dutch Shell, Chevron, BP, industry winAramco has also become more valuable than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – put together.

With shares of Saudi Aramco hitting the upper circuit of 10% on listing day, the oil major is now valued at $1.88 trillion and Saudi Arabia’s equity market has displaced India from its place as the ninth biggest market in the world. Saudi Aramco also surpassed the market cap of Microsoft and Apple to become the most valuable company in the world. Apple and Microsoft – have free float of 88% and 98.6%, respectively.

Interestingly, the listing gain of about $180 billion is bigger than the market cap of India’s most valuable company – Reliance Industries (RIL). As on Wednesday’s close, RIL boasts of a market capitalisation of $139.92 billion. The second-largest Indian company, Tata Consultancy Services, commands a market valuation of $108.19 billion, Bloomberg data showed.

At $2.1 trillion, India is now the 10th largest stock market by capitalisation, $280 billion less than that of Saudi Arabia, Bloomberg data showed. In December 2017, India had pipped Canada to become the eighth-biggest equity market in the world. “The implied 3.9% dividend yield and 4.3% free cash flow yield is, however, much lower than global peers and indicates Aramco will trade at a significant premium,” said a Bloomberg report.

However, with just 1.5% of free float, Saudi Aramco features among the third-lowest large companies with a minuscule free float in the world. While the carmaker Audi has a public float of 0.36%, state-controlled German utility EnBW Energie Baden-Wuerttemberg has a free float of 0.37%, Bloomberg data showed. At a valuation of $1.88 trillion, Saudi Aramco is as big as 89.3% of India’s combined market capitalisation whereas India’s largest company RIL accounts for just about 7% to the country’s market capitalisation.

Aramco has also become more valuable than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – put together.

The oil company raised a record $25.6 billion from an initial public offering (IPO) in what so called the biggest-ever IPO by offloading shares at 32 riyals each, which valued the company at $1.7 trillion.

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