The Chinese fintech giant Ant Group seems to be completely ready to make the biggest ever stock market debut in the world.
Shares worth about $34.4bn on the Shanghai and Hong Kong stock markets is to be sold by the company which is backed by Jack Ma – the billionaire founder of e-commerce platform Alibaba.
Amid reports of very strong demand from major investors, the share price of the stocks was set by advisers on Monday.
Saudi Aramco’s $29.4bn float last December is currently the largest IPO ever.
Only about 11 per cent of its shares are being sold by Ant which is an online payments business. But the whole business has been valued at $313bn based on the pricing of the shares.
It was reported that the shares owned by Ma in Ant is worth about $17bn which increases the net worth of Ma close to $80bn and confirming him as China’s richest man.
Alipay, the dominant online payment system in China is owned by run by Ant. In the Chinese market, e-payment devices and apps have long overtaken the use of cash, cheques and credit cards for transactions.
For the year ending June, the total volume of payments on its platforms in China was a massive $17.6tn, Alipay has said previously.
Alipay has 1.3 billion users, according to Alibaba’s most recent annual report. Most of the users are in China while a rest are of its nine e-wallet partners elsewhere in Asia.
Wealth management, insurance and money transfer services are also offered by Ant.
The company is expected to make its dual listing in Shanghai and Hong Kong next week. This dual launch also highlights the growing importance of the Hong Kong exchanges as a global financial hub.
Threats of restricting Chinese firms’ access to US capital markets have been issued by the Trump administration which is seen as a move in the on-going trade war between the United States and China. In response to these US threats, Chinese governments has called on its top tech companies to get listed on domestic stock markets.
Billions by selling their shares via the Hong Kong stock market have already been raised by Chinese tech firms, including NetEase and JD.Com.
The flotation would be of huge significance for Shanghai and Hong Kong, Ma told a conference in China on Saturday according to the Bloomberg news agency.
“This was the first time such a big listing, the largest in human history, was priced outside New York City,” he told the Bund Summit. “We wouldn’t have dared to think about it five years, or even three years ago,” said Ma.
The scheduled IPO from Ant is to be launched on November 5.
A chance to secure a slice of Asia’s fast-growing tech sector was offered to investors by the floatation, analysts said.
“Digital commerce and infrastructure platforms in Asia provide an unprecedented opportunity for Asian and global investors to be part of the next wave of value creation in Asia,” said Varun Mittal, an emerging markets expert at consultancy EY, in Singapore.
“Earlier this year, India saw a rush of international investors keen to invest in infrastructure and platforms ecosystem, which is being replicated in the Chinese ecosystem now.”
(Adapted from BBC.com)