HSBC confirms advisory mandate on bumper Saudi Aramco IPO

HSBC has confirmed its mandate to advise Saudi Arabia's national oil company Aramco on the public listing of its stock, a bid tipped by analysts to be the world's largest ever initial public offering (IPO).

The global bank's chief executive Stuart Gulliver officially announced the lucrative mandate at a shareholders' meeting in Hong Kong on Monday (24 April), confirming what newswire Reuters had reported in February.

The move would see the banking giant join peers JPMorgan and Morgan Stanley on the deal, which has been given dizzying valuations by many market commentators.

Aramco is expected to list around 5% of its equity in a bid to raise $100bn (£78bn, €91.8bn), with valuation estimates for the whole company coming in as high as $2trn.

While Tadawul, the Saudi Stock Exchange, would get the primary domestic Aramco listing slated for 2019, lobbying for the secondary international listing has intensified, with London, New York and Hong Kong stock exchanges leading suitors.

In February, Riyadh surprised the market by choosing New York-based boutique bank Moelis & Co as an IPO adviser, but bigger banking sector names have since followed suit.

If a $2trn valuation is ultimately realised, Aramco would beat the current valuations of the world's largest publicly traded companies Apple ($720bn), Google ($585bn) and Microsoft ($500bn), as well as the world's largest oil and gas company ExxonMobil ($340bn), several times over.