Ant Group IPO: What We Know So Far About The Biggest IPO Ever

Even before the date of the IPO has been finalised, news around Ant Group's listing is being watched with much anticipation around the world. Ant Group has planned to increase the valuation target for its IPO to at least $280 billion on account of strong demand, says a Bloomberg report citing sources.

A buzz for the IPO has been created in China, where is five new mutual funds that were sold over Alipay mobile app, Ant's own payments and lifestyle platform, raised a total of 60 billion yuan (equivalent to $8.96 billion) last week, from individual investors, following a blitz of advertising and marketing events in the country, The Wall Street Journal reported.

The investors had to agree to lock-up their money for 18 months, to invest in these mutual funds that have reportedly signed an agreement with the Ant Group and its underwriters to purchase an undisclosed number of shares in the company's coming IPO and hold them at least for one year.

The five funds were managed by some of China's largest investment firms and have told investors it could invest up to 10 percent of its assets in Ant, the WSJ report added.

Biggest IPO Ever

The IPO, which will be launched on the Hong Kong and Shanghai Stock Exchanges, is expected to raise $35 billion from the dual listing, which will be biggest initial public offering ever anywhere in the world.

The current record for the biggest IPO is being held by Saudi Aramco's $29.4 billion issue held in 2019.

Ant Group's listing will split equally between the exchanges of Hong Kong and Shanghai.

In 2014, Alibaba Group Holding had raised $21.8 billion in a stock sale on the New York Stock Exchange (NYSE), which was a record-breaking IPO at the time.

About the group

Ant Group, formerly known as Ant Financial and Alipay, is an affiliate of the Alibaba Group from China. It operates Alipay, the world's largest mobile and online payments platform and Yu'e Bao, the world's largest money-market fund. It also runs Sesame Credit, a third-party credit rating system.

In 2017, Ant Financial unveiled its facial recognition payment technology through its Alipay services in China.

In September 2018, the company launched the Ant Financial Technology brand for all of its technology products and services.

Hong Kong set for a blockbuster listing

Hong Kong's bankers and investors are hoping that the Ant Group's IPO will be a stellar listing as it could help the direction of the region's stock market and also poses as an opportunity to showcase China's ability to rival the American exchanges as a place to raise money.

The metropolitan has been able to shrug off political curbs from the Chinese government, tensions between China and the US and COVID-19 to launch three dozen listings since June. However, the massive dual listing of Ant Group is being labeled as "the deal of the decade."

According to a Bloomberg report, stockbrokers in Hong Kong are so confident of the issue being a blockbuster IPO, that they are offering investors 20 times as much leverage.

US-China tensions

A Reuters report citing sources said that the US State Department has submitted a proposal for the Trump administration to add China's Ant Group to a trade blacklist, even before the fintech firm goes public.

While the Hong Kong stock exchange has scheduled an Ant hearing for as soon as next week, as per a Bloomberg report, if delayed further, the IPO holds the risk of straddling the 3 November US elections. The one week gap between the pricing of IPO and the start of trading could mean high volatility for investors, amid the elections and prevailing tensions with the US.