Top 5 Companies with the Biggest IPOs of All Time
Initial Public Offering (IPO) is known as a way for companies to get an injection of fresh funds as additional capital. As for the purpose behind an IPO, each company may vary. For smaller companies, an IPO can help the company get credit more easily or attract more investors to invest. Meanwhile, for large companies, IPOs are conducted to obtain additional capital that can be used for business expansion needs in the future.
The Importance of IPO for Investors and Companies
Initial Public Offering (IPO) however is very important, not only for a business but for public investors. For a business, IPO is often the beginning of the development of the company. Because the company gets fresh capital that can be used for operational purposes, expansion and so on. Meanwhile, for investors, IPO is a gateway to be able to invest in a company with bright business prospects. Even if investors cannot buy a company’s shares during an IPO, investors can still buy company shares when they are listed on the stock exchange. And this is only possible if the company goes through the IPO process first.
When an IPO is held, not all companies will get the attention of investors. Because investors basically only want stocks that have good prospects in the future. So, it’s normal for several companies to lack interest during an initial public offering or IPO, because the company’s shares are considered not to have good prospects from an investor’s point of view.
But, on the other hand, there are companies that have a lot more attention than expected. These companies were considered successful in the IPO process, and even made them remembered as companies with the largest IPOs in the world.
In this article, we will discuss the 5 companies with the biggest IPOs of all time, at least until now, December 2022.
5 Companies with the Biggest IPOs of All Time
The success of an IPO is determined by how much funds are obtained in the process of offering the company’s shares. The bigger it means there is a lot of demand for shares of companies that carry out IPOs. And is an indication that the company has good prospects, has a track record of success or is a popular company.
The following list is the 5 largest IPOs of all time, as of December 2022:
1. Saudi Aramco
Saudi Aramco or Saudi Arabian Oil Company is an oil and gas company from Saudi Arabia.
Founded for the first time in 1933, this company is headquartered in Dhahran, Saudi Arabia.
Saudi Aramco took first place by obtaining funds worth US$25.53 billion at the time of its IPO in 2019. Saudi Aramco got the total funds after successfully selling 3 billion of its shares at a price of US$8.53. And broke the previous record held by Alibaba conducting an IPO in 2014.
2. Alibaba
After the record for the largest IPO made by Alibaba was broken by Saudi Aramco, Alibaba now occupies the second position in the ranking of the largest IPOs of all time. Alibaba managed to raise US$21.8 billion in its IPO in 2014.
The reason behind the success of Alibaba’s IPO is because of the company’s high popularity. Alibaba is a technology company with various successful lines of business. For example, Aliexpress is a global scale marketplace, a place where users from various countries can easily buy imported products from China that are super cheap.
3. SoftBank
The 3rd place is filled by SoftBank, a communications service company based in Tokyo, Japan. From its name, it is as if this company is a banking institution. However, SoftBank is basically a company engaged in the communications sector, such as cellular communication services, fixed line and ISP services.
SoftBank managed to raise IPO funds worth US$21.3 billion, slightly lower than Alibaba. This company conducted an IPO in 2018, on December 10 to be precise. Although the IPO was deemed successful, it’s a shame that SoftBank’s shares immediately fell by 14.5% on the first day they were traded on the stock exchange.
4. NTT Mobile Communication Network
NTT Mobile Communication Network is a company from Japan and operates as a mobile phone operator in Japan. The company is headquartered in Tokyo and is also known as NTT DoCoMo.
NTT Mobile Communication Network is in 4th place as the company with the largest IPO of all time. NTT conducted an IPO in 1998 and succeeded in raising US$18.1 billion. NTT’s success in its IPO was due to the fact that the company at that time dominated the telecommunication market in Japan. When carrying out the IPO, NTT controlled around 57% of the cellular market in Japan.
5. Visa
Visa is an American multinational financial company. Headquartered in San Francisco, California, Visa specializes in debit and credit card processing. Visa provides services in the form of electronic transfers throughout the world via credit or debit cards with the VISA logo on them.
Visa conducted an IPO when global economic conditions were experiencing a crisis due to subprime mortgages. However, the unique thing about this IPO was that Visa managed to raise quite a large amount of funds, namely US$17.4 billion. And became one of the most successful IPOs of all time. Visa conducted an IPO on March 18, 2008.
Conclusion
The list is a list of companies that managed to raise very large funds during the IPO. There are many factors that can affect the success rate of an IPO and even make the outcome exceed expectations. For example, the popularity of the company, the company’s prospects because it has a unique business model, the company’s prospects because it dominates the market and so on. These factors encourage investors to buy company shares during an IPO because they are considered the best price compared to when the price rises when traded on the stock exchange. Although there is no guarantee that the IPO price will be lower than the share price when traded on the exchange.
