Fintech giant Ant Group is set to start trading in the Shanghai and Hong Kong Stock Exchanges from November 5 with the aim to pull off the biggest ever IPO of all time.
World’s largest
The initial public offering (IPO) of Ant Group formerly known as Ant Financial is making history as it is on track to surpass the previous record-breaking IPO of Saudi Aramco that took place last year.
The $34.5 billion offering will take the company’s market value to nearly $315 billion, making the company bigger than U.S’ biggest bank JPMorgan Chase & Co. Not just that, Ant’s valuation will be worth more than the gross domestic product (GDP) of countries like Egypt, Chile or Finland. As per Bloomberg, Ant will be larger than payment rival Paypal, media giant Walt Disney, and four times larger than Goldman Sachs Group.
Ant Group has attracted at least $3 trillion of orders from individual investors and the demand for the retail portion in Shanghai exceeded initial supply by more than 870 times as of October 30, reported Bloomberg. The IPO is attracting some of the world’s biggest money managers and institutional investor’s interest. The offering will also boost the country’s capital markets as it garners huge amounts of capital from all over.
Ant’s transformation
Ant dominates the mobile payments in China with its flagship app Alipay. Ant lets users buy on credit, invest in mutual funds, and find insurance through established players. It also allows users to invest their savings without having to go to the bank. Alipay arranges small loans to consumers and small businesses and earns a service fee from the lender. The Alibaba-backed company also earns commission on the money its users invest with its asset management partners.
In September, Ant Group launched a blockchain-based cross-border trade settlements platform ‘Trusple’ which is based on the company’s blockchain technology Antchain.
Ant Financial changed its name to Ant Group to rebrand itself more as a tech firm than a financial services provider. Accumulating so many digital service offerings in its platform has helped it worth more and gather investors interest to have a piece of the pie.
Boosting Ma’s fortune
Jack Ma who has a controlling stake in Ant Group through Alibaba and other entities is poised to become the world’s 11th-richest person after the Ant IPO. Ma’s 8.8% stake is worth $27.4 billion based on the stock pricing in Hong Kong and Shanghai.
‘It’s the first time that the pricing of such a big listing has been determined outside New York City’ he told the Bund Summit in the eastern financial hub of Shanghai. Ma said the financial and regulatory system stifles innovation, calling for a revamp to extend financial services to more small firms and individuals on the basis of technology — that Ant is largely based on.
Zooming out
Ant Group may have limited opportunities abroad as tensions with the United States and India rise and it will be tough for the company to enter those markets, however, its leading position in the domestic market and investor interest from the other parts of the world could possibly add on to China’s aim of dominating the tech industry in the world.
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