Ant Group sets record with $34 billion IPO

• Ant Group’s IPO, world’s biggest, receives strong institutional support   
• Dual listing in Hong Kong and Shanghai amid mounting China-US tension
• Becoming a global payment and financial services giant

Ant Group, the financial technology arm of Chinese e-commerce giant Alibaba is set to raise just under $34.5 billion in a dual listing in Hong Kong and Shanghai, making it the largest initial public offering (IPO) in history amid the pandemic. 

Ant Group’s IPO is bigger than Saudi Aramco's $29.4 billion debut listing on the Saudi Tadawul, then the world’s largest, concluded in January 2020. The Saudi Arabian national oil company was valued at $1.7 trillion.

Ant Group’s IPO, world’s biggest, receives strong institutional support

Priced at HKD 80.00 per H share, or $10.30, investors showed strong interest and it was oversubscribed according to traders.

Ant’s order books on the Hong Kong offering to institutional investors was oversubscribed hours after the launch on Tuesday and was closed a day earlier than planned.

“Priced at $10.30, the interest is there. There’s demand according to our counterpart in Hong Kong. Everyone is excited. The Ant Group story is spectacular,” said Astro del Castillo, managing director at First Grade Finance, an investment company in the Philippines. 

Dual listing in Hong Kong and Shanghai amid mounting China-US tension

The company has chosen to list in Hong Kong and Shanghai over New York, which it is known to initially favour, due to the ongoing friction between China and the US. The Trump Administration’s increasingly adversarial stance towards Chinese companies on so-called national security grounds has caused other mainland firms to turn to Hong Kong.

“It’s the first time that pricing of such a big listing - the largest in history has been determined outside New York City,” Alibaba founder Jack Ma said in a business summit over the weekend.

Ant Group, in choosing Hong Kong, not only makes the territory the largest IPO market globally but helps to restore its position as the gateway for Chinese companies to the world and for foreign companies access to the mainland. It’s a positive development for the city which has been beset by much adversities in the last couple of years that have damaged its reputation and put its relevance as an international financial centre into question. It faced debilitating civil unrest that culminated in the recent imposition of a new national security law by the mainland authorities, the coronavirus pandemic at the start of this year, as well as the fallout from China-US tension which saw the removal of its special trading status.  

Becoming a global payment and financial services giant

Alipay is China’s largest mobile payments business operated by Ant Group. In 2004, Alipay launched as an escrow service to address the issue of trust between online buyers and sellers in the early days of e-commerce in China. It has grown through continuous innovation to serve approximately 1.3 billion users worldwide together with its global e-wallet partners.

It has been expanding into overseas markets especially in surrounding Southeast and South Asia by partnering with established local payment players.

“We strive to enable all consumers and small businesses to have equal access to financial and other services that are inclusive, green and sustainable,” the company said.