Jack Ma. Picture: BLOOMBERG
Jack Ma. Picture: BLOOMBERG

Hong Kong — Jack Ma’s Ant Group is set to raise about $34.5bn in Shanghai and Hong Kong, a blockbuster listing that will rank as the biggest IPO ever and make it one of the most valuable finance firms on the planet.

The fintech giant will have a market value of $315bn even before exercising its greenshoe option, based on filings on Monday. That is about the same valuation as JPMorgan Chase and four times larger than Goldman Sachs.

The IPO is attracting interest from some of the world’s biggest money managers, and sparking a frenzy among individual investors in China clamouring for a piece of the sale. In the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for more than 76-billion shares, or over 284 times of the initial offline offering tranche, according to Ant’s Shanghai offering announcement.

“This was the first time such a big listing, the largest in human history, was priced outside New York,” billionaire founder Ma told the Bund Summit in Shanghai on Saturday. “We wouldn’t have dared to think about it five years, or even three years ago.”

Such demand puts the much-anticipated IPO on track to surpass Saudi Aramco’s $29bn sale in 2019. Ant priced its Shanghai stock at 68.8 yuan ($10.27) apiece and its Hong Kong shares at HK$80 ($10.32) each. The company may raise another $5.17bn if it exercises its greenshoe options.

This is “a homecoming for capital markets in Shanghai and Hong Kong”, said existing investor John Ho, founder of Janchor Partners. Ho, who invested $400m in Ant two years ago, added that he is trying to secure a bigger allocation of the Hong Kong shares and that being able to invest in Ant “is priceless”.

T Rowe Price, UBS Asset Management and FMR, the parent of Fidelity Investments, are among the money managers angling for a piece of the deal, a person familiar with the matter has said.

Hong Kong stockbrokers are so confident Ant IPO will go smoothly that they are offering to let individual investors buy the stock with as much as 20 times leverage.

“The investment thesis of Ant is a systemic valuation transfer from mainstream Chinese financial institutions such as banks to a platform that’s data-driven, with a huge network effect, and enjoying almost zero marginal costs of cross-selling,” said Nick Xiao, CEO of Hywin International, the Hong Kong arm of Hywin Wealth which is helping rich individuals buy shares of Ant. “Every bank and securities house and fund manager will have to plug into it, while every consumer, corporate or individual, cannot live without it.”

The fintech giant that runs the Alipay platform is charging ahead with its landmark offering just days ahead of the US election. The Hong Kong listing day will be on November 5, only two days after the US vote, an event that could spark market volatility if the vote is disputed or counting delayed.

Ant has picked China International Capital and CSC Financial. to lead its Shanghai leg of the IPO. CICC, Citigroup, JPMorgan and Morgan Stanley are heading the Hong Kong offering. Existing Ant shareholders will not be able to sell shares for six months, according to the filings.

The company will issue no more than 1.67-billion shares in China, equivalent to 5.5% of the total outstanding before the greenshoe, according to its prospectus on the Shanghai stock exchange. It will issue the same amount for the Hong Kong offering, or about 3.3-bibillionhares in total.

Alibaba Group, which was co-founded by Ma and owns about a third of Ant, has agreed to subscribe for 730-million of the Shanghai shares, which will be listed in Shanghai under the ticker “688688”, according to the prospectus. Alibaba will hold about 32% of Ant shares after the IPO.



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