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Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Jack Ma’s Ant Group is looking to raise at least $ 35 billion in its initial public offering after assessing initial investor interest, people familiar with the matter said, putting the Chinese fintech giant on track for a record sale of debut.
Ant raised his IPO target based on a valuation increase of about $ 250 billion, up from previous estimates of $ 225 billion, said the people, who asked not to be identified to discuss private matters. Earlier it hoped to raise at least $ 30 billion, family members said.
Ant’s simultaneous listing in Hong Kong and Shanghai may mark the largest initial public offering in history, topping Saudi Aramco’s record sale for $ 29 billion. Ant could exceed Market capitalization of Bank of America Corp., and be more than twice the size of Citigroup Inc. Among US banks, only JPMorgan Chase & Co. is bigger at $ 300 billion.
Read more about Ant clearing his audience in Shanghai
Ant received a nod from regulators in Shanghai on Friday to proceed with its public share sale. In the wake of its IPO plans, the company was hit by a series of new regulations aimed at reducing risks in China’s online financial sector. Regulators have restricted sources of funding for small loans, capped loan rates, and imposed new capital and licensing requirements on Ant and other conglomerates.
The Hangzhou-based company is seeking an audience with the Hong Kong Stock Exchange on Thursday to overcome the next key hurdle, the people said. Ant declined to comment on an emailed statement.
Anatomy of a Chinese financial powerhouse
Jack Ma’s giant has been geared towards technology and services
Sources: Ant Group, Goldman Sachs, data compiled by Bloomberg
Ant has chosen China International Capital Corp., Citigroup, JPMorgan and Morgan Stanley for its sale in Hong Kong.
Ant generated 72.5 billion yuan in revenue in the first half, after annual sales of 120.6 billion yuan in 2019, it said. The firm posted a profit of 21.1 billion yuan in the first half of this year.
Ant, which grew out of the payments app Alipay, now derives most of its income from issuing quick consumer loans, fueling China’s growing consumer spending. He also runs an insurance and money market funds business, in addition to providing credit rating and technology services for the financial industry.
Read more about how the Ant Group works by Jack Ma
Alipay has 711 million active users, mainly in China, who take advantage of it to buy everything from a quick coffee to a property, generating $ 17 billion in payments in the 12 months to June.
For those who do not have cash available to spend through Alipay, Ant operates services that make small unsecured loans: Huabei (Just Spend) and Jiebei (Just Lend). The former focuses on quick consumer loans for the purchase of iPhones and refrigerators, while the latter finances everything from travel to education.
Ant uses part of his capital for these loans, but most of the money comes from the banks, and the company acts as a gateway. The platforms made loans to approximately 500 million people in the 12 months to June, charging annualized rates on their smallest loans of around 15%.
(Add Ant’s income, profit in the seventh paragraph.)
