Saudi Aramco raises IPO to record $29.4 billion by over-allotment of shares

Saudi Arabia’s oil company, Saudi Aramco said it had exercised its greenshoe option to sell an additional 450 billion shares.

This exercise will raise the size of Saudi Aramco initial public offering (IPO) to a record $29.4 billion.

Aramco initially raised a $25.6 billion, which was itself a record level, in its December IPO by selling 3 billion shares at 32 riyals ($8.53) a share.

But, it had indicated that it could sell additional shares through the over allotment of shares.

Aramco shares were flat at 35 riyals shortly after the market opened, according to Refinitiv data.

A greenshoe option allows companies to issue more shares in an IPO when there is greater demand from participants in the initial offer.

Investors allocated the additional shares during book-building, Aramco said.

“No additional shares are being offered into the market today and the stabilizing manager will not hold any shares in the company as a result of exercise of the over-allotment option,” Aramco said.

Aramco shares have been volatile amid heightened tensions between the United States and Iran.

It lies across the Gulf from Saudi Arabia.

Aramco shares fell to 34 riyals on January 8.

Its lowest since trading began on Dec. 11, but closed at 35 riyals on Thursday.