China’s payments market is poised to raise more than £ 26 billion in the largest IPO in the world
A Chinese payments company is poised to raise more than £ 26 billion in the world’s largest stock market.
Ant Group’s dual listing in Hong Kong and Shanghai will be valued next month at around $ 10.30 (£ 7.90) per share, or £ 214 billion, about £ 100 billion more than the most valuable British firm, Unilever, which is worth £ 121.85 billion.
The company owns the mobile payment service Alipay, which was set up by Chinese entrepreneur Jack Ma and has more than 1.2 billion users.
Flex the muscles: Thanks to Ant Group’s dual listing in Hong Kong and Shanghai, it’s valued at £ 214 billion
The listing will be the largest in history, with the money raised to exceed the £ 23 billion taken in a float by state oil giant Saudi Aramco last year.
Shares in Ant Group are expected to start trading days after the US presidential election on Nov. 3, with the stock market receiving strong demand from small investors. Ma, who also founded Alibaba, said it was the first time such a large deal had been priced outside of America. He added: “We didn’t dare to think about it five years ago, or even three years ago. But a miracle has just happened. ‘
Based in Hangzhou, Ant Group was launched as a payment provider for e-commerce titan Alibaba in 2004, before spinning off in 2011.
Alibaba will still hold a 32 percent stake in the company after the IPO. The Alipay app acts like a Swiss army knife of financial services, with a ‘digital wallet’ that allows users to make debit and credit card payments with their smartphones.
Alipay’s main rival in China is Wechat, which also boasts over a billion accounts.
In comparison, the US giant Paypal says it has about 350 million active users.
Ma has suggested that Alipay could eventually replace traditional banks, which he likened to “ pawnshops ” because they typically require customers to have adequate collateral before lending. He said China’s relatively young financial system should be powered by technologies such as big data, cloud computing and blockchain, rather than following traditional banking methods that involve large amounts of red tape.
However, Ant is also facing increasing regulatory scrutiny of its lucrative consumer credit business, while the US State Department is also reportedly seeking to blacklist it.
Ant said his deal terms yesterday, saying that major investors in the Shanghai tranche of the float would be Singaporean state investor Temasek Holdings, as well as Singaporean and Abu Dhabi sovereign wealth funds GIC and Abu Dhabi Investment Authority.
It has reserved 80 percent of its domestic supply for 29 major investors who will be incarcerated for at least a year and will also include China’s National Social Security Council.
Ant shares are expected to start trading in Hong Kong and Shanghai on Nov. 5.