From Saudi Aramco to Visa - Here are the biggest IPOs that shaped the global market

An Initial Public Offering is crucial to all firms as it indicates their transition from being a private company to a publicly listed company on the stock exchange. This transition allows a public company to sell its shares or securities to investors. It raises funds enabling businesses to grow and expand. There are instances when IPOs attract worldwide interest because they are too large.

Here, we look into the top five largest IPOs of all time, examining the companies behind these monumental market debuts:

1. Saudi Aramco

Saudi Aramco, officially known as the Saudi Arabian Oil Company, holds the record for the largest IPO in history. This Saudi energy giant, one of the most valuable companies in the world, raised an astounding $25.6 billion when it went public. Aramco’s IPO was a strategic move by the Saudi government to open up the national economy and diversify its investments. Despite opting to list only on the Saudi Stock Exchange, the IPO saw tremendous domestic and international interest. The company has continued to grow, maintaining a strong valuation and showing annual growth close to 10%.

2. Alibaba Group

Alibaba, the Chinese e-commerce giant, had the largest IPO until Aramco surpassed it. Raising $21.8 billion, Alibaba's IPO was a significant event, especially given the company's extensive business reach, which includes platforms like AliExpress, Freshippo, and Youku. The company's shares were highly sought after, with the stock price surging by 38% on the first day of trading. Listed on the New York Stock Exchange, Alibaba's IPO set the stage for its global expansion, although it has faced challenges due to political and regulatory pressures in China.

3. SoftBank Corp

SoftBank Corp, a major player in the Japanese telecommunications market, raised $21.3 billion in its IPO, making it the largest Japanese IPO ever. Despite a rocky start with its stock price dropping 14.5% on the first day, SoftBank's IPO highlighted the company's significant role in mobile and internet services in Japan. SoftBank's investment portfolio, including stakes in companies like WeWork, has faced its share of ups and downs, particularly during the COVID-19 pandemic. However, the company remains a key player in the tech and communications sectors.

4. NTT Mobile Communication Network (NTT DoCoMo)

NTT DoCoMo, a prominent Japanese telecommunications company, raised $18.1 billion in its IPO, which was a monumental event for Japan’s stock market. At the time, NTT DoCoMo controlled a substantial share of Japan’s mobile market. The IPO, underwritten by Goldman Sachs, made headlines for its size and for being a major step in NTT DoCoMo’s growth. Although it has since been delisted from the New York Stock Exchange, NTT DoCoMo remains a significant player in Japan's telecommunications industry.

5. Visa

Visa's IPO stands out not only for the amount raised but also for its timing. Taking place during the global financial crisis, Visa’s IPO managed to raise $17.4 billion, a testament to the company’s resilience and strong business model. As a leading payment processing company, Visa facilitates millions of transactions daily worldwide. Unlike traditional financial institutions, Visa doesn’t extend credit to consumers, which helped shield it from the risks of defaults and late payments during the credit crunch. Today, Visa remains one of the largest financial services companies globally, with a robust market presence.

The largest IPOs in history reflect the diverse industries and global reach of these companies. From energy and e-commerce to telecommunications and financial services, these IPOs not only raised significant capital but also marked major milestones in their respective sectors. The success of these IPOs underscores the importance of strategic timing, robust business models, and the ability to attract a wide range of investors.