Alibaba's Ant Group files for blockbuster Hong Kong, Shanghai dual listing

By Julie Zhu

HONG KONG (Reuters) - Ant Group, Alibaba's fintech arm and China's dominant mobile payments firm, filed for a dual listing in Hong Kong and on Shanghai's Nasdaq-style STAR Market on Tuesday and could raise as much as $30 billion in what would be the world's largest IPO.

Ant's initial public offering would be the first simultaneous listing in Hong Kong and the year-old STAR Market, boosting Hong Kong's status as an international IPO market and helping enhance STAR as a capital markets centre.

Ant, already the world's most valuable unicorn - or billion-dollar unlisted tech firm - did not disclose the size, timetable or other key details of the offering in its preliminary prospectus.

Ant declined to comment on its IPO details.

People with knowledge of the matter have previously said Ant plans to raise more than $20 billion from the dual-listing which could take place in October, valuing the group at over $200 billion.

The offering size could even reach $30 billion if market conditions allow, said three of the people this week.

That would make it the world's biggest IPO since oil giant Saudi Aramco raised $29.4 billion last December, which surpassed the record set by China's Alibaba Group Holding Ltd's $25 billion float in 2014.

Ant looks to sell between 10% and 15% of its shares, one of the sources said, requesting anonymity as the details were not yet public. Ant said in its filing that it plans to sell no less than 10% of its enlarged share capital in the dual-listing.

The company was valued at about $150 billion in its last funding round https://www.reuters.com/article/us-ant-financial-fundraising/ant-financial-raises-14-billion-in-worlds-largest-ever-single-fundraising-idUSKCN1J407Y in 2018, which brought in big-name investors such as Temasek Holdings Ltd and Warburg Pincus LLC.

Ant plans to use the proceeds raised to expand its user base and cross-border payments as well as enhancing its research and development capabilities.

 

BOOST FOR HONG KONG

Ant's prospectus gave investors the first look at the firm's financial health ahead of the IPO.

The company said revenue was 72.5 billion yuan ($10.5 billion) in the first half of the year, up nearly 40% compared to the same period in 2019. Profit rose nearly 12 times to 21.9 billion yuan in the same period.

The numbers underscore how Ant, 33%-owned by Alibaba and controlled by Alibaba founder Jack Ma, has remained resilient even as the COVID-19 pandemic has crippled many businesses.

Ant has amassed a range of financial licenses including payments, online banking, insurance and micro lending to operate in China's vast financial market.

Its biggest and best-known business is Alipay, the largest player in China's 430 trillion yuan ($62 trillion) third-party mobile payments market, according to market researcher Qianzhan.

Alipay had 711 million monthly active users as of June, with payment volumes reaching 118 trillion yuan in China, Ant's filings showed.

Alibaba set up Alipay in 2004, modelling the business on U.S. peer PayPal Holdings Inc, to help Chinese buyers shop online. It spun off the unit which operated the online payments platform in 2011 over the objections of shareholders ahead of its own IPO.

It re-branded the unit https://www.reuters.com/article/us-china-alibaba/alibaba-affiliate-alipay-rebranded-ant-in-new-financial-services-push-idUSKCN0I50KJ20141016 as Ant Financial in October 2014 and in May it was renamed Ant Group.

Both Hong Kong and mainland China have been working to raise their appeal as places to raise cash.

The float would be a boost to the city's status as a global capital markets centre as its leaders come under fire for the imposition of a national security law by Beijing criticised in the West as draconian.

Companies raised $10.3 billion via IPOs on the STAR Market in the first seven months of the year, making the bourse the second-biggest market globally for such listings, behind Nasdaq but ahead of Shanghai's main board and Hong Kong, Refinitiv data showed.

CICC, Citigroup, JPMorgan and Morgan Stanley are sponsoring Ant's IPO in Hong Kong, while CICC and China Securities Co are leading the float's onshore leg.

 

($1 = 6.9116 Chinese yuan renminbi)

 

(Reporting by Julie Zhu; additional reporting by Yingzhi Yang and Sumeet Chatterjee; editing by Christopher Cushing, Jason Neely, Susan Fenton, Kirsten Donovan)