Saudi Aramco raises IPO to record $29.4 billion by over-allotment of shares

State-owned oil company Saudi Aramco said on Sunday it had exercised its “greenshoe option” to sell an additional 450 million shares, raising the size of its initial public offering (IPO) to a record $ 29.4 billion.

Aramco initially raised a $ 25.6 billion, which was itself a record level, in its December IPO by selling 3 billion shares at 32 riyals ($ 8.53) a share. But it had indicated it could sell additional shares through the over-allotment of shares.

Aramco shares were flat at 35 riyals shortly after the market opened, according to Refinitiv data.

A greenshoe option, or over-allotment, allows companies to issue more shares in an IPO when there is greater demand from participants in the initial offer. Investors were allocated the additional shares during book-building, Aramco said.

“No additional shares are being offered into the market today and the stabilizing manager will not hold any shares in the company as a result of exercise of the over-allotment option,” Aramco said.

Aramco shares have been volatile amid heightened tensions between the United States and Iran, which lies across the Gulf from Saudi Arabia.

Aramco shares fell to 34 riyals on Jan. 8, its lowest since trading began on Dec. 11, but closed at 35 riyals on Thursday.

Thursday’s closing price valued Aramco at $ 1.87 trillion, above the IPO price but below Crown Prince Mohammed bin Salman’s coveted $ 2 trillion target for the IPO.