Ant Group poised to break IPO record

Chinese firm set to eclipse Saudi Aramco record with an initial public offering in Hong Kong and Shanghai that could raise $34bn

Ant Group kicked off the week by announcing its intention to carry out the world’s largest ever initial public offering (IPO). The $34bn (£26.1bn, €28.7bn) that the Chinese e-payments behemoth hopes to raise would comfortably eclipse the $29bn raised by Saudi Aramco at the end of 2019.

According to statements released on Monday, October 26, the financial arm of ecommerce giant Alibaba plans to sell 1.67 billion shares at HK$80 ($10.32) each in Hong Kong and 1.67 billion shares at 68.80 yuan ($10.25) apiece in Shanghai.  

The sale will take place on Tuesday, October 27, with the securities starting to trade on November 5.

Whereas Saudi Aramco’s IPO was bolstered by the Saudi government twisting the arms of wealthy citizens and allied nations to support the state-backed entity, Ant Group is counting on much more spontaneous enthusiasm. Indeed, should over-allotment options be taken up then the sale could come closer to $40bn.

According to Bloomberg, institutional investors have subscribed for more than 76 billion shares, just under 285 times the IPO offering tranche, according to Ant’s share offering announcement. Chinese retail investors are also expected to flock in, hoping to get a stake of the company behind China’s leading online payment system, Alipay.

While the network already dominates, its position and the supremacy of online payments is set to be further strengthened by the imminent introduction of a digital yuan. Speaking to the 2nd Bund Summit in Shanghai, Mu Changchun, the head of the People’s Bank of China’s digital currency research institute, stressed that the digital currency will work with, rather than compete with, existing Chinese payment networks. He said: “They don’t belong to the same dimension. WeChat and Alipay are wallets, while the digital yuan is the money in the wallet.”

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Speaking at the same conference, Alibaba founder Jack Ma said: “This was the first time such a big listing, the largest in human history, was priced outside New York City. We wouldn’t have dared to think about it five years, or even three years, ago.”

 

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