Alibaba’s Ant Group In World’s Largest IPO?

Anil Prabha

August 31, 2020

In what can only be termed as a speculative report, according to Reuters, Ant Group, has filed for a dual listing in Hong Kong and on Shanghai’s Nasdaq-style STAR Market on Tuesday and could raise as much as $30 billion in what would be the world’s largest IPO.

It’s a staggering figure, to put it mildly. This will be the first simultaneous listing in Hong Kong and the year-old STAR Market, and it will boost Hong Kong’s status as an international IPO market and help enhance STAR as a capital markets centre.

Ant Group has declined to comment on the IPO details, according to Reuters.

The news agency references an earlier story of theirs that mentioned Ant planned to raise more than $20 billion from the dual listing which could take place in October, and it will value the group at over $200 billion. The offering could even reach $30 billion, according to three other anonymous individuals, who spoke to the news agency.

For the uninitiated, last December, Saudi Aramco raised $29.4 billion, which eclipsed China’s Alibaba Holding Ltd’s $25 billion float in 2014. One of the anonymous sources has told the news agency that Ant looks to sell between 10 percent and 15 percent of its shares.

It seems the company was valued at $150 billion in its last funding round back in 2018, and this attracted big names such as Temasek Holdings and Warbrg Pincus to get into the mix as well.

According to the new agency, the prospectus for Ant also gave investors a bird’s eye view of the firm’s financial footing as it readies itself for this blockbuster IPO.

It seems revenue was at $10.5 billion, which is 40% more than the same period last year. Profit also rose nearly 12 times as well. For the uninitiated, Ant is 33% owned by Alibaba and controlled by Alibaba’s founder, Jack Ma.

It dominates the ecosystem with a range of financial licenses. They cover a broad range of elements, such as payments, online banking, insurance and micro lending.

According to market researcher Qianzhan, Alipay is its biggest and best-known business is Alipay, the largest player in China’s $62 trillion third party mobile payments market. The filings from the company indicate that there were 711 million monthly active users as of June, and its payment volumes hit 118 trillion yuan. These are just phenomenal numbers.

The timing is also important. According to the New York Times, the offering is coming at a time when Hong Kong’s status a financial hub needs a shot in the arm during a time of upheaval. The new national security law and anti-government protests may dominate the news cycle for now, but this offering could definitely turn the tide.

The publication does mention that the offering is about to happen against a backdrop of tumultuous times for Chinese technology companies in the United States as well. President Trump is in ‘election season mode’, and his latest moves against TikTok and WeChat are emblematic of the current distrust that seems to be pervading into the ecosystem.

According to the NYT, Alibaba’s chief executive, Daniel Zhang, thinks that the current situation is “fluid”, and he has been quoted as saying that they are closely monitoring the latest shift in U.S. government policies.

Sources: Reuters and the New York Times.

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About the author
Anil Prabha

Editor In Chief

Anil started his career in journalism all the way back in 2003. After traversing the sphere of editorial, corporate communications and advertising, he has now come full circle and is back in the world of journalism. He believes in the power of the written word, and its ability to enthrall, delight and inform the reader.

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