Saudi Arabia set to raise over $11.2 billion from Aramco stock sale, priced at lower end of range

Saudi Arabia is set to raise more than $11.2 billion from its secondary public share offering in state-controlled oil giant Aramco, after the stock was priced at the lower end of its expected range.

The company on Friday said it will price the 1.545 billion of shares on offer at 27.25 Saudi riyal ($7.27) apiece, with the sale expected to take place when markets next open on Sunday. A range of between 26.70 and 29 Saudi riyals per share was floated in the firm's initial marketing.

The 27.25 Saudi riyal price is nearly 4% below the public stock's last settlement on the Tadāwul Saudi stock exchange.  

The company's shares have lost over 2% since the May 30 announcement of its secondary offering. Investors typically expect a discounted price when new shares enter the public market, because of the increase in the overall supply of stock available to trade.

The pricing decision was announced as global oil prices come under pressure, hit by an uncertain demand outlook despite the typical seasonal increase in gasoline consumption over the summer. The influential Organization of the Petroleum Exporting Countries and its allies also announced on June 2 that they were extending formal and voluntary supply cuts.

The strain on oil prices and broader global energy transition away from hydrocarbons do not appear to have stifled interest in Aramco's latest offering, however. Citing anonymous sources, Reuters reported that the offering was covered four to five times and generated stronger international demand than during Aramco's ground-breaking IPO in 2019, when the company raised $29.4 billion. CNBC could not independently confirm the report.

The backbone of Riyadh's economy, Aramco has traditionally appealed to investors because of its