In the world’s biggest stock market debut, Ant Group is set to raise up to $34.4 billion as investors rush to buy into the fast-growing Chinese fintech giant even amid threats of greater scrutiny at home and abroad.
Before a so-called greenshoe option for a 15 percent over allotment of shares, the dual listing, a first for Shanghai’s Nasdaq-style STAR Market and Hong Kong, will value Ant at around $312 billion.
At that valuation, Ant is worth more than China’s Industrial and Commercial Bank, the world’s biggest bank in terms of assets. The money raised would also shatter the record set last December by oil major Saudi Aramco with its listing of $29.4 billion.
Jack Ma, Ant’s billionaire founder and affiliate of Alibaba Group Holding, said it was a “miracle” for such a large listing to take place outside of New York.
Hope amid concerns
The looming market launch of Ant was clouded by concerns about rising regulatory scrutiny at home for both its lucrative consumer credit business and the US State Department’s proposal to add the business to a trade blacklist.
However, global investors have largely shrugged off those worries as they bet on the continued and rapid growth of the company that also runs China’s largest mobile payment network, Alipay and distributes wealth management and insurance products.
“The fear of missing out and the lack of other opportunities of this calibre” was spurring investor interest in the IPO, said Justin Tang, head of Asian research at investment adviser United First Partners in Singapore.
Overwhelming investor response
Sources say that within one hour after the launch, Ant’s order books on the Hong Kong offering to institutional investors were oversubscribed.
In the first hour, many prospective investors placed orders worth at least $1 billion, the sources said, adding that the number of institutional orders could exceed roughly 1,000.
Based in the Chinese city of Hangzhou, Ant aims to collect approximately $17.2 billion in Shanghai and approximately the same in Hong Kong.
The group has earmarked 80% of its domestic offering to 29 strategic investors that will be locked up for at least one year. A wholly-owned Alibaba subsidiary has agreed to buy 44% of the Shanghai float. Alibaba is the Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology founded by Jack Ma.
Other strategic investors in the Shanghai float include the Chinese National Social Security Fund Council, the Singapore State Investor Temasek Holding unit, and the Singaporean and Abu Dhabi sovereign wealth funds GIC and Abu Dhabi Investment Authority (ADIA).
According to recent filings, major Chinese insurers and mutual funds would also have shares allocated through the strategic investor route.
Ant’s shares are scheduled to begin trading on November 5 in Hong Kong and Shanghai, two days after the US election.