How to buy Saudi Aramco shares in IPO?

Since the launch of Saudi Aramco IPO on the 17th of November 2019, everyone in Saudi Arabia be a Saudi or an expatriate wants to know how they can buy Saudi Aramco shares. Well, once again we are here to guide you about the procedure. Recommended: How many shares are allocated by Aramco to Individuals?

What is the price of Saudi Aramco shares at IPO?

Saudi Aramco has set the price of SR 32 per share to receive applications in IPO in which 3 billion shares will be issued and as much as SR 96 billion ($25.6 billion) is going to be raised. The final price will be set later, and it will be between SR 30 to SR 32. In order to read further details, you can download the Saudi Aramco prospectus from here.

Who can buy Saudi Aramco shares?

Since the IPO is launched at Tadawul i.e. Saudi stock exchange, the following people are entitled to buy shares;

  1. Saudi Nationals
  2. GCC nationals with a Saudi Bank account
  3. Iqama holders of Saudi Arabia
  4. Any business or company registered in Saudi Arabia

What are the dates of the Saudi Aramco IPO?

You can apply to buy shares of Saudi Aramco in its IPO from the 17th of November 2019 until the 28th of November 2019. 

Should an expatriate buy Saudi Aramco shares?

Everyone should decide based upon his investment portfolio, but I personally believe that it is a good investment to buy Saudi Aramco shares in the IPO and there are several reasons for that;

  1. The Saudi government is on the back of the company and they will not let it lose any value as they are intending to list it on the New York stock exchange as well. They will not let the share perform badly in Saudi Arabia.
  2. They are offering only 1.5% of the shares in the first IPO which means that the shares will be oversubscribed.
  3. Expatriates can sell the shares very easily at any point in time. The process to sell the shares purchased in IPO is quite simple.

List of Receiving Banks in Saudi Aramco IPO

The only requirement to buy Saudi Aramco shares in IPO is to have an online banking account in any of the following 13 banks.

  1. National Commercial Bank (NCB)
  2. Saudi British Bank (SABB)
  3. Samba Bank
  4. Al Rajhi Bank
  5. Al Awwal Bank
  6. Alinma Bank
  7. Arab National Bank (ANB)
  8. Bank Al Bilad
  9. Bank Al Jazira
  10. Banque Saudi Fransi
  11. Saudi Investment Bank
  12. Riyad Bank
  13. Gulf Investment Bank

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How to buy Saudi Aramco shares in IPO?

In this article, we will be explaining the procedure to buy Saudi Aramco shares through NCB but the procedure in all other banks is also the same. I may also write a detailed procedure through Al Rajhi Bank looking at the response I receive through this article.

The first thing you need to do to buy Saudi Aramco shares in the IPO is to log in to your internet banking account. Your home page will open with several options on the left-hand side from where you need to click on the “IPO”.

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A new page will open from where you can see all the IPOs available to subscribe to the Saudi Stock Exchange at the moment. Since there is only one IPO at this moment, you can find it here. There is some important information on this page which you should know before clicking on the “subscribe button;

  • The indicative Share Price is set at SR 32
  • The minimum shares you can buy at Saudi Aramco IPO is 10 shares with an amount of SR 320.
  • You can only buy shares in the multiple of 10 which means that you can buy 110, 120 shares but cannot buy 105 shares.

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On the next page, you need to agree with the terms and conditions. We have reproduced those terms and conditions below. Basically, you are agreeing to the fact that the payment does not mean that the shares will be allotted to you. It is subject to the discretion of the Saudi Aramco to either accept or reject any application.

“I hereby acknowledge and undertake that I agree to subscribe for shares in the Saudi Arabian Oil Company (Saudi Aramco) (“Saudi Aramco”) as specified in this application and that I understand that if the final offer price is set at a level lower than the top end of the offer price range (which is SAR 32). then. in respect of the surplus amount of subscription. it will be refunded to me on the basis of my election in this subscription application either by (a) be considered for allotment of additional shares at Saudi Aramco’s full discretion. whereby the additional shares will be calculated based on the final offer price or (b) receiving a refund of the surplus amount in cash to my account as confirmed by me in this subscription application. I further understand that in the case of fractional shares. an amount will be refunded to my account equal to the value of the fractional shares. and if no additional shares are available. I will receive a cash refund to my account for surplus amounts. I hereby declare that I have read the entire prospectus. have carefully considered it and understood its contents. have accepted it and have subscribed on that basis in the above-mentioned shares. I hereby declare that I have not. and none of the individuals included in this application have. previously applied for the subscription in shares of Saudi Aramco and Saudi Aramco has the right to reject the duplicated applications. in the event of any duplicates. I also declare that I have accepted the shares allocated pursuant to this application and that I have accepted all subscription terms and conditions included in the prospectus. I undertake not to cancel or amend this form after submission to the Receiving Entity.”

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On the next page, you will be required to enter the number of Saudi Aramco shares you want to purchase through IPO. Once the number of shares is entered, there will be two options from which you will have to select one. After the Saudi Aramco sets a final offer price, there will be some unutilized amount so these options are about it.

  1. Select this option if you want Saudi Aramco to issue you some additional shares for the utilized amount.
  2. Select the second option if you want them to refund the unutilized amount.

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As soon as you click the button “Calculate Total Amount', the system will take you to another page where you can review all the details you have entered earlier. Here you can see the total amount for which you are going to buy Saudi Aramco shares in the IPO. If you are comfortable with the details, click on the “Confirm” button.

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Congratulations! You have successfully lodged your application to buy Saudi Aramco shares in its first IPO. Now you should download the PDF file of this transaction and save it for your reference.

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When will Saudi Aramco refund the money?

As we have stated earlier, the Saudi Aramco is offering only 3 billion shares in this IPO. In case they receive applications for more than 3 billion shares, they will refund the money to the investors. In any case, Saudi Aramco will refund the excess subscription money by the 12th of December 2019. You can further read about other deadlines on the website of Al Ahli capital.

How to sell the shares after the IPO?

Many people have asked me a question about how would they sell Saudi Aramco shares once they are allotted to them. I have checked my NCB account today, they have already opened an account with NCB capital which means that I would be able to sell it through NCB capital very easily.

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Can we buy Aramco shares on behalf of family members?

The primary requirement to buy Aramco shares in Saudi Arabia is to have a bank account. In case your wife, children, parents or anyone else has a separate bank account, you can transfer money to their account to buy shares on behalf of them.

Can we buy additional Aramco shares after the first transaction?

After the lodge of the first application to buy Aramco shares in its IPO, I tried to buy additional and the system gave me the following error explaining that my applications have already been submitted.

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However, if you have more than one bank accounts in Saudi Arabia, you can buy additional shares of Saudi Aramco after the first application.

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