Ant may raise up to US$17b in Shanghai IPO leg, say sources

Hong Kong

CHINA'S Ant Group could raise up to US$17.3 billion in the Shanghai leg of the likely US$35 billion dual listing, the world's largest ever, after some large investors submitted bids in the range of 68-69 yuan per share, people with knowledge of the matter said.

The simultaneous listing in Hong Kong and Shanghai of the Chinese financial technology giant, backed by e-commerce behemoth Alibaba, would beat the previous largest initial public offering (IPO), Saudi Aramco's US$29.4 billion float last December.

The pricing for the Shanghai tranche of the IPO was decided on Friday, Alibaba founder Jack Ma said on Saturday, without disclosing the price.

Later on Saturday, a person with direct knowledge of the matter said many large Chinese fund managers had bid for Ant shares in the listing on the Nasdaq-style STAR Market in Shanghai at close to 69 yuan (S$14.01) apiece.

At 69 yuan per share, Ant could raise up to 115.3 billion yuan in the Shanghai tranche, valuing the company as a whole at up to 2.1 trillion yuan, before a 15 per cent greenshoe or over-allotment option is exercised.

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Under local market rules, the final price for the IPO is based on guidance from large investors.

The IPO would burnish the Shanghai-based exchange's status as a fast-growing capital markets centre, at a time when rising Sino-US tensions have triggered concerns about the prospects of listing of Chinese companies in New York.

Ant has chosen the stock code 688688 for its Shanghai listing, which for Chinese speakers combines two of the luckiest or most auspicious numbers, together symbolising long-lasting prosperity and good fortune in Chinese culture.

Books for the Shanghai leg of the float will open for one day on Oct 29. Ant plans to sell up to 1.67 billion shares in the Shanghai float, which is set to be the biggest IPO in China.

Strategic investors, whose investments in Ant's STAR IPO will be locked up for at least 12 months, will account for 80 per cent of the Shanghai float. Among them are Zhejiang Tmall Technology, a unit of Alibaba, which has committed to purchase 44 per cent of the Shanghai float, Ant's updated prospectus showed.

Ant aims to split the share sale evenly between Hong Kong and Shanghai, selling up to 11 per cent of its enlarged share capital. For the Hong Kong leg, Ant plans to open order books as soon as Monday and price the offering in coming days, separate sources have said.

Ant's shares are likely to start trading a few days after the US presidential election, which could fuel a spike in market volatility. REUTERS