Ant Group, which was previously known as Ant Financial, the world’s most valuable Fintech firm and subsidiary of the Alibaba Group Holding (NYSE:BABA), has reportedly received approval from Chinese regulatory authorities for the Hong Kong leg of its planned initial public offering (IPO).
The Ant Group is 33% owned by Alibaba and controlled by multi-billionaire Jack Ma. The Fintech giant is planning to list in Shanghai and Hong Kong in a concurrent IPO. A hearing or consultation with the Hong Kong stock exchange, an important part of the regulatory clearance process, is scheduled to take place on Octobre 19, 2020, CNBC reported.
The China Securities Regulatory Commission has reportedly approved the Hong Kong part of the IPO, according to CNBC which cited sources familiar with the matter. A hearing or meeting (scheduled today) with the Hong Kong stock exchange should reveal more details about the upcoming IPO.
Ant Group’s IPO might potentially become the largest of all time. Reuters had revealed that the Fintech firm may be planning to secure as much as $35 billion in capital. An analyst had claimed that Ant Group’s valuation might be somewhere around $200 billion+.
The Chinese Fintech company offers several key financial services such as the Alipay mobile payments app in China. Alipay claims more than 700 million users. Ant Group also offers various insurance to wealth management products. However, a very significant part of its revenue comes from selling Fintech-focused products and generating profits from technology service fees.
Ant Group’s IPO plans don’t seem to have stalled or don’t appear to be affected by reports that the US had been trying to put the Fintech firm on a trade blacklist (known as the “Entity List”).
As covered in the latest China: WeiyangX Fintech Review, news reports from October 16, 2020 revealed that due to the strong demand, Ant Group intends to raise its IPO valuation target to at least US$280 billion, which is at least 12% higher than the previous valuation target of US$250 billion.
It is reported that Ant Group’s financing goal is to raise approximately US$35 billion. If market conditions permit, Ant Group is expected to make the world’s largest IPO. The valuation of US$280 billion will be higher than that of Bank of America and three times that of Citigroup. The US$35 billion in financing will be higher than Saudi Aramco’s previous US$29 billion.
According to reports, Ant Group’s IPO may be postponed, but Ant Group subsequently stated that the Shanghai and Hong Kong listing plans are making “steady progress” in obtaining the necessary regulatory approvals.