Much hype has surrounded the highly anticipated IPO of Saudi Aramco–dubbed to be the world’s largest IPO–since the kingdom’s crown prince Mohammed bin Salman first announced plans for the offering in January 2016.

At the time of the announcement, Prince Mohammed said the sale of up to 5% of Aramco would generate $100 billion of proceeds earmarked to support the kingdom’s 2030 diversification plan. However, he didn’t reveal any further details, which opened the door to speculation. Now, recent windfalls generated through taxes and the kingdom’s “anti-corruption purge” may lead the Saudi government to reconsider the IPO plans, if not scrapping it completely.

Initially, the question was whether the whole company will go public or only certain segments of the business. And then most importantly, what is Saudi Aramco worth? Though, the answer to that question varies. Wood Mackenzie estimated the value of Aramco in 2005 at $781 billion. Bloomberg suggests $2.5 trillion while other analysts expect the value of the company to hover around $10 trillion.

Saudi Arabia has already easily secured the targeted $100 billion in proceeds though through a recent “anti-corruption purge” that jailed up to 56 high-profile royal family members and businessmen who refused to surrender their wealth in return for freedom.

In addition, the Saudi government also boosted its fiscal revenues though imposing a 5% value-added tax on everything including healthcare, staples and education. It also imposed taxes on expatriates’ dependents, removed fuel subsidies and increased electricity bills for expats.

So, the idea of generating money through an Aramco IPO to support Saudi Arabia’s Vision 2030 plan became meaningless, as the kingdom has managed to secure more than that already. The question now is if the IPO will even take place and whether it will be locally or dual listing.

Saudi officials said that the company will be listed in two markets: the Saudi Stock Exchange, known as the Tadawul, and in another international market.

For the local part, Saudi Arabia’s Capital Market Authority is undergoing a significant change and modernization in preparation for the Aramco IPO and the privatization of other Saudi industries. It has amended its settlement rules, allowing short-selling and increasing foreigners’ ability to buy and sell on the exchange.

Additionally, Saudi Arabia changed Aramco’s status to a joint-stock company as of Jan. 1. This will enable it to issue shares and be regulated like other companies.

The government also said Saudi Aramco would have a board of 11 members, with six nominated by the state. It also provided some clarity on the future relationship between the kingdom and its largest revenue earner.

While Saudi Arabia has made some concrete steps toward an IPO, big questions remain about the kingdom’s willingness and readiness to list the company internationally. Several exchanges are competing for the honor, including those in London, Hong Kong, Tokyo and New York. Each market has its pros and cons.

“Aramco public listing should be made on the Saudi stock exchange—not New York or London. Tadawul listing would boost the Saudi market, advance transparency and encourage investment,” Ali Shihabi, founder of the Arabia Foundation, told attendees at an event in Washington D.C. earlier this month.

Media reports said that Saudi Arabia may scrape the idea of listing Aramco completely, but the government denied these reports saying that the offering is on track for the second half of 2018. However, it didn’t comment on whether the company will be listed on an international market.

Other sources have said that Aramco will most probably list the company locally, and scrape the idea of listing it abroad because things have dramatically changed since the IPO announcements.

Comments