Saudi Aramco's publicly listed share will be up for sale starting early December. The company is looking to raise $100 billion on a $2 valuation, which will make this the largest IPO ever. Alibaba's 2014 IPO currently holds the record for raising $25 billion dollars which is yet to be topped. Aramco plans to go public on Saudis' exchange called Tadawul (TASI) and sell approximately 2% of its shares. Aramco's entry in Tadawul is expected to raise substantial foreign investor interest in the market.

According to estimates by various investment banks, Aramco's valuation will most likely be closer to $1.2 - $1.5 trillion. The company has pledged an annual dividend of $75 billion for the first five years; however, investors have been paying close attention to potentially weak governance and high valuation issues instead. Dominic Bokor-Ingram, senior portfolio manager at Fiera Capital, has expressed his concern, which many investors share as well, that the $75 billion figure is simply a just that - a large enough number to entice investors to purchase shares - without really considering better alternatives towards which money can be invested to optimize the company's capital structure. Aramco has also been receiving opposition from environmental groups, 10 of which have written to international banks including Goldman Sachs (GS  ), JPMorgan Chase (JPM  ), Morgan Stanley (MS  ), Bank of America (BAC  ) and others to protest their role in Aramco's fundraising as they have called the company "the world's largest corporate emitter of carbon dioxide."

While Saudi Aramco is hoping for a large international audience, the government will also require numerous high-profile individuals and members of the country's elite to purchase stakes in the offering. This should not be a problem given that they would want to stay in good favor with Saudi Crown Price Mohammed bin Salman. The Saudi stock exchange was formed in 2007 and only opened its market to large foreign investors in 2015 and has since taken steps to make it easier for foreigners to buy and sell shares. Foreign investors purchased 19% ($3.2 billion) of shares on the exchange in October and sold 12% of the total.

There are concerns that since the company is planning to sell a 2% to 5% stake, the state remains as the majority shareholder with 95% to 98% stake and that investors will have little influence on the company's operations. This means that they will demand a risk premium given the government's controlling power and the fear that if the state is strapped for cash it will turn to the company and take out from its profits. Investors in Russia's state-run Gazprom and Rosneft have expressed similar concerns and that is why the stock is trading at a discount to other oil and gas companies and has a higher dividend yield (7%). Aramco will most likely have to follow this strategy in order to raise the planned $100 billion especially given that it hopes for half of the shares to be purchased from foreign investors. Additionally, the company's income is very much dependent on the price of the underlying commodity which could essentially devastate the valuation estimates. Mohammed bin Salman plans to use IPO proceeds to fund his "Vision 2030" which is a plan to shift the country's economic reliance away from oil and develop public service sectors such as healthcare, education, and infrastructure.