Alibaba Applies for Shanghai, Hong Kong Dual Listing

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On Tuesday, Alibaba fintech arm Ant Group which is China’s dominant mobile payments firm filed for a dual listing in Hong Kong and Shanghai’s Nasdaq-style STAR Market. And, the most interesting thing is that this could rise as much as $30 billion and that would be the world’s largest IPO.

Alibaba's ANT
Investing.com

The initial offering of the Ant’s would be the first simultaneous listing in Hong Kong and the year-old STAR Market, and that would boost Hong Kong’s status as an international IPO market and would also help in enhancing STAR as a capital markets centre.  And, the most important part is that Ant is already the world’s most valuable billion-dollar unlisted tech firm. It has not yet disclosed the size, timetable, or other key details of the offering in its preliminary prospectus. Plus it has also declined to comment on any IPO details.

Though, many sources have confirmed this earlier that Ant has plans to raise more than $20 billion from the dual listing which could take place in October. Interestingly, this would increase the value of the group over by $200 billion. Plus, people who are well versed in this market business have confirmed that if the market conditions allow then the offering size could even reach $30 billion.

And, if this increment happens then Ant would make the world’s biggest IPO after oil giant Saudi Aramco’s $29.4 billion that it made last December. This record surpassed the record set by China’s e-commerce website Alibaba Group Holding Ltd’s $25 billion in 2014. But now it looks like the game is going to be again on Alibaba’s side.

Sources are confirming that Ant is planning to sell between 10 per cent and 15 per cent of its shares. But details are not public yet so it is difficult to tell an exact number. It also confirmed that it is going to file with the Shanghai bourse; and that it plans to sell no less than 10 per cent of its enlarged share capital in the dual listing.

Around 2018, the company had a value of about $150 billion, which brought in big-name investors;such as Temasek Holdings Ltd and Warburg Pincus LLC. For now, Ant is planning to use the proceeds raised to expand its user base; and cross-border payments as well as enhancing its research and development capabilities. The prospectus provided by Ant has given investors the first look; at the firm’s financial health ahead of the mega IPO.

As compared to 2019, the revenue of the company was up by 40 per cent i.e.; nearly 72.5 billion yuan in the first half of the year. And, also its profit rose nearly 12 times to 21.9 billion yuan in the same period. This is quite amazing to see that how the company Ant 33 per cent owned by Alibaba;and controlled by Alibaba founder Jack Ma; has remained all well going while COVID-19 has smashed many big businesses down.

 

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