Investors line up for Ant Group’s record $34.4b IPO

Photographer: Anthony Kwan/Bloomberg

Ant Group Co Ltd is poised to raise up to $34.4 billion in the world’s largest stock market debut as investors rush to buy into the fast-growing Chinese fintech giant despite risks of greater scrutiny at home and abroad.

The dual listing, a first for Shanghai’s Nasdaq-style STAR Market and Hong Kong, would value Ant at about $312 billion before a so-called greenshoe option for a 15% overallotment of shares.

At that valuation, Ant is worth more than Industrial and Commercial Bank of China, the world’s biggest bank by assets. The money raised will also shatter the record set by oil major Saudi Arabian Oil Co (Saudi Aramco) with its $29.4 billion listing last December.

Jack Ma, the billionaire founder of Ant and affiliate Alibaba Group Holding, said it was a “miracle” that such a large listing is taking place outside New York.

Ant‘s looming market debut had been clouded by concerns over growing regulatory scrutiny at home for its lucrative consumer credit business as well as a U.S. State Department proposal to add the company to a trade blacklist.

Global investors, however, have largely shrugged off those concerns as they bet on continued rapid growth of a group that also operates China’s biggest mobile payments platform 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.

BOOKS OVERSUBSCRIBED

Ant‘s order books on the Hong Kong offering to institutional investors was oversubscribed one hour after the launch, two people with direct knowledge of the matter said.

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

Ant declined to comment on investor demand.

Headquartered in the Chinese city of Hangzhou, Ant is aiming to raise about $17.2 billion in Shanghai and roughly 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 unit of Alibaba has agreed to purchase 44% of the Shanghai float.

Other strategic investors in the Shanghai float include China’s National Council for Social Security Fund, a unit of Singapore state investor Temasek Holding, as well as Singaporean and Abu Dhabi sovereign wealth funds GIC and Abu Dhabi Investment Authority.

Large Chinese insurers and mutual funds will also have shares allocated via the strategic investor route, Monday’s filing showed.

RECORD DEBUT

Ant shares are expected to start trading in Hong Kong and Shanghai on Nov. 5, two days after the U.S. election.

The company set the price tag for the Shanghai leg of the listing at 68.8 yuan ($10.27) per share and HK$80 ($10.32) per share for the Hong Kong tranche, the exchange filings showed.

The price represents a multiple of 31.4 times Ant‘s 2021 earnings and 24.2 times its 2022 earnings forecast, said a source with direct knowledge of the matter.

By comparison, Alibaba is trading at 34.28 times trailing 12-month earnings in Hong Kong.

Ant declined to comment on the price multiples.

The group’s China listing would eclipse the record set there previously by Agricultural Bank of China’s $10.1 billion float in 2010. The record in Hong Kong was set by insurance major AIA’s $20.5 billion offering in 2010.

The bookbuilding for the Hong Kong leg will run from Monday to Friday, while books for the Shanghai leg open for one day on Thursday.

Ant‘s IPO would also serve to burnish STAR’s status.

Companies raised $22.5 billion via IPOs and secondary listings on STAR between the start of the year and mid-October, making it the third-biggest stock market behind Nasdaq and Hong Kong, Refinitiv data shows.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.