Comment: Saudi Aramco float may not have hit London this time, but it could be back

Aramco's Manifa oilfield

Saudi Aramco’s IPO had the biggest, most prestigious team of London bankers ever assembled.

Yet all the Crown Prince’s horses and all of his men couldn’t get investors to stump up the yen.

Not Lazard’s Charlie Foreman or Moelis’s Yorick van Slingelandt. Not BAML’s Julian Mylchreest nor Morgan Stanley’s Franck Petitgas. Not Credit Suisse’s Jim Peterkin nor Goldman Sachs’ Andrew Fry.

And that despite the legal structure devised by White & Case’s IPO king Inigo Esteve in Old Broad Street.

Non-Saudi investors still shied from a state-controlled business vulnerable to missile attacks and a global drive for green energy.

Instead, the Saudis are opting for a smaller share sale on the local Tadawul market, limiting to 1500 the number of foreign investors who can sign up.

No roadshows to the world’s capital cities. No jubilant opening on the London Stock Exchange.

But never say never. In this scaled-back IPO, the shares could trade well. Yesterday’s price range was set far tighter than most floats, suggesting high demand. A combination of national pride and the carrot of a free share for every 10 after six months hints there will be few sellers. And, given the Kingdom’s fear of losing face, it’s hard to think of a safer dividend.

The likes of FTSE and S&P are set to include Aramco in their index lists, forcing Western tracker funds to invest and get used to it.

This could be just the first stage of the IPO process. A few years of profits and dividends, and foreign investors’ resistance may waver.

With all those fancy bankers knocking on their doors, it will be hard to resist.