Ant IPO Draws $3T Demand
|Jack Ma, Founder, Ant Group.
Photo credit: World Economic Forum, licensed under CC BY-NC-SA 2.0
The imminent initial public offering of Chinese fintech giant Ant Group has drawn a record of roughly $3 trillion in retail investor demand, the majority of that amount, $2.8 trillion, coming from China while $168 billion came from Hong Kong. In contrast, Ant is seeking to raise $34.4 billion split between Shanghai’s STAR Market and the Hong Kong Stock Exchange, meaning investors are vying for multiple times the amount of shares available in Ant’s IPO.
Ahead of its IPO, Ant has allocated the majority of its available shares to strategic investors while leaving relatively little space for retail investors to fight it out. In figures, retail investors are bidding for 872 times the number of shares earmarked for them in Shanghai, as indicated by a filing from Ant.
Ant, best known for its Alipay mobile payments app, is the biggest fintech company in China and has a very strong business that produced $18 billion in revenue last year. The company is also very profitable, reporting $3.5 billion in profits in six months between October 2019 to March 2020.
Ant is set to hold what would mark the largest-ever public offering, surpassing the current record held by oil giant Saudi Aramco. For its IPO, Ant is targeting a valuation of over $300 billion, a valuation that’ll clinch big profits for many of the company’s private backers.
As a private company, Ant, which is affiliated with Chinese ecommerce giant Alibaba, has raised only a single round of outside funding, that round being a $10 billion investment that it secured in 2018. Among the company’s backers who are set for big profits in its IPO include the sovereign wealth funds of Singapore and Malaysia, the Canada Pension Plan Investment Board, and American private equity firms General Atlantic, Silver Lake, Warburg Pincus, and Carlyle Group.