Ant Group to close HK institutional book early

Hong Kong

ANT Group will close institutional order books of the Hong Kong portion of its record-setting dual IPO ahead of schedule due to strong demand, sources with direct knowledge of the matter said.

The institutional book of the US$17.2 billion Hong Kong listing was due to close on Thursday, but that deadline will be accelerated to Wednesday 5.00pm in each region, three sources said.

The book was oversubscribed just one hour after the launch on Monday, two separate sources said, demonstrating investor frenzy for the initial public offering (IPO) of the Chinese fintech giant that has stoked heavy demand for cash and sent Hong Kong money market rates to five-month highs.

Ant Group declined to comment on the planned early closure of the Hong Kong institutional book. It is looking to raise up to US$34.4 billion in Hong Kong and Shanghai, with the offer split between the two cities, giving it a valuation of about US$312 billion.

Ant, which operates China's biggest mobile payments platform Alipay, is an affiliate of e-commerce giant Alibaba Group Holding. It will offer 41.76 million shares, or 2.5 per cent of its total shares in Hong Kong, to retail investors whose demand to buy the stock is expected to be strong.

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Hong Kong operates a "clawback" system where heavy oversubscription from small investors can result in them getting a greater share.

The prospectus shows the total amount will be increased to 167.1 million shares, or 10 per cent of the deal, if the initial retail allocation is more than 20 times oversubscribed.

The city's brokers are readying billions of dollars of margin financing to lend to customers to buy the stock. Retail investors need to finalise and pay for the shares they have bid for by Friday, according to Ant's prospectus. REUTERS