Ant Group, the world’s highest-valued fintech company, submitted its registration documents for an initial public offering (IPO) to the China Securities Regulatory Commission (CSRC) on September 22, paving the way for what could be the largest-ever fundraising when it seeks to list in Hong Kong and Shanghai.
The firm, which owns mobile payment service Alipay, is also looking to raise its Hong Kong and Shanghai IPO target to USD 35 billion from the previous USD 30 billion after assessing early investor interest. The blockbuster IPO could surpass Aramco’s USD 29.4 billion listing to become the world’s largest.
The Star Market, one of the two boards it plans to list on, operates a Nasdaq-like, registration-based process instead of the approval-based system used by the main boards of the Shanghai and Shenzhen exchanges. (Star is the science and technology board of the Shanghai Stock Exchange.) This translates to less regulator involvement, a more market-oriented environment, and a more streamlined listing process.
China launched the Star Market in 2019, aiming to support more domestic hi-tech listings amid tensions with the US.
Ant Group, which applied for the IPO on August 25, has already responded to several rounds of inquiry, and the Listing Committee greenlit the application on September 18, allowing the company to submit the registration to the CSRC on Tuesday. It now awaits an approval within 20 business days.
If the registration is accepted, the company will then have to issue shares within one year.
The fintech giant predicts a year-on-year (YoY) revenue growth of 38% to 42% for the first nine months of 2020, up to RMB 117.5 (USD 17.0 billion), driven by “the development of the domestic digital economy and the improvement of users’ minds,” referring to people increasingly adopting digital payments, according to the documents. During the same period, gross profits are expected to be RMB 66.8 billion to RMB 69 billion, up 67% to 73% YoY.