Alibaba's Jack Ma becomes richer than Walmart heirs with mega Ant IPO

Andrew Cummings
October 27, 2020

Chinese e-payments giant Ant Group said Monday it plans to raise $34 billion in a listing shared between Hong Kong and Shanghai, making it the biggest IPO in history.

The e-payments behemoth, which runs China's dominant online payment system Alipay, plans to sell 1.67 billion shares at HK$80 ($10.30) each in Hong Kong from Tuesday.

The company is expected to make its dual listing in Shanghai and Hong Kong next week, underling the latter exchange's growing importance as a financing hub.

The company will raise about $34.5 billion from the share offering, which is expected to surpass oil company Saudi Aramco's $29 billion share sale previous year, making Ant Group's offering the biggest in the world.

The company's entry into Shanghai and Hong Kong comes after Beijing called on national flagships of the tech sector to list on domestic stock exchanges, in a period of sharp economic and political rivalry with the US.

The pricing announcements for Ant Group's dual IPOs also came days after Alibaba founder Jack Ma called the company's offering a "miracle", as it was the first time that such a big listing was priced outside of NY. That would be more than JPMorgan Chase & Co. and four times bigger than Goldman Sachs Group Inc. The company could raise another US$5.2 billion if it exercises its green shoe options, taking its market value to about US$320 billion.

Ant's mammoth listing is poised to boost the fortunes of a group of early investors and employees. The firm then started offering credit to small businesses, branching out from its consumer-finance focus, and eventually expanded to services such as block chain, cloud computing and artificial intelligence.

"The investment thesis of Ant is a systemic valuation transfer from mainstream Chinese financial institutions such as banks to a platform that's data-driven, with a huge network effect, and enjoying nearly zero marginal costs of cross-selling", said Nick Xiao, CEO of Hywin International, the Hong Kong arm of Hywin Wealth that's helping rich individuals buy shares of Ant.

The dual-listing is seen as a win for China and Hong Kong's capital markets, which have previously missed out on major IPOs of Chinese firms.

Ma has a combined 50.52 percent of Ant's shares through direct and indirect shareholdings. Ant Group did not immediately respond to Business Insider's request for comment. It will issue the same amount for the Hong Kong offering, or about 3.3 billion shares in total.

Many prospective investors placed orders worth at least $1 billion (roughly Rs. 7,380 crores) in the first hour, said one of the sources, adding that the number of the institutional orders could reach about 1,000.

Around 900 million people in China are believed to use Ant Group's Alipay app.

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