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BEIJING / HONG KONG (REUTERS) – China’s Ant Group won the final go-ahead from the country’s main securities watchdog for the registration of its Shanghai offering, the regulator said on Wednesday (October 21), topping the last regulatory obstacle for its 35,000 million dollars. (S $ 48 billion) double listing.
Ant, the fintech company backed by Chinese e-commerce group Alibaba Group Holding, plans to simultaneously list in Hong Kong and Shanghai in the coming weeks, the sources said.
The listing could be the world’s largest initial public offering, beating the record set by Saudi Aramco’s $ 29.4 billion float last December. The initial public offering would also be the first simultaneous listing in Hong Kong and on the STAR Market in Shanghai.
Ant is scheduled to conduct price inquiries for the Shanghai offering on October 23 and will set the price on October 27 based on its updated prospectus presented on the local exchange.
The fintech group aims to split the share offering evenly between Hong Kong and Shanghai, selling up to 1.67 billion on each exchange. That would represent up to 11% of its expanded share capital, before a 15% overallotment or greenshoe option is exercised, the prospect showed.
Strategic investors that agree to accept a 12-month lock on investments in Ant’s STAR IPO will account for 80% of the national float. Among them is Zhejiang Tmall Technology, a wholly owned unit of Alibaba, which has pledged to buy 730 million shares, according to the prospectus.
The stock sale plan comes after the China Securities Regulatory Commission accepted the registration of Ant’s domestic float on the Nasdaq-style STAR market, as part of local rules. The company submitted its preliminary prospectus in late August.
The proceeds will be used in part to support Ant’s digital economy business and enhance its research and development capabilities.
Ant, China’s largest mobile payments company, reported operating income of 118.2 billion yuan in the nine months to September, up 42.6% from the previous year, according to the prospectus.
The nine-month gross profit increased 74.3% to 69.5 billion yuan.
Hangzhou-based Ant also obtained approval from the Hong Kong Stock Exchange on Monday for the offshore leg of its IPO, Reuters reported.
For the Hong Kong leg, Ant plans to start a short pre-trading period this week before opening the order books next week. Its shares are likely to start trading a few days after the November 3 US presidential election, the sources said.
After receiving initial feedback from potential investors, Ant is looking to increase the size of its offering to $ 35 billion from up to $ 30 billion, with the goal of a valuation of about $ 250 billion or more, Reuters reported.
If completed, Ant’s IPO would significantly enhance Hong Kong’s status as a capital markets hub, with $ 28.8 billion in IPOs and secondary listings between the beginning of this year and mid-October, Refinitiv data showed.
That helped Hong Kong rank second on the global stock market, after Nasdaq, despite the fallout from the coronavirus pandemic and anti-government protests.
Ant does not plan to offer a fundamental tranche in Hong Kong in anticipation of strong demand from institutional investors, Reuters reported.
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