Didi Chuxing filing confidentially for big US IPO: sources

Shanghai

ASIA'S top ride-hailing startups are pushing ahead with listing plans, as they seek to take advantage of a boom in equity offerings to fund expansion in everything from food delivery to autonomous driving.

Beijing-based Didi Chuxing has filed confidentially with the US Securities and Exchange Commission for an initial public offering that could raise several billion dollars, according to sources. Its South-east Asian peer Grab Holdings aims to announce a merger with a blank-cheque company or SPAC in the US soon in a deal valued at more than US$34 billion, the sources said.

These listings pave the way for some of the largest tech debuts globally this year as demand for ride services and ride-sharing jumped after pandemic-induced disruptions in Asia. Didi and Grab are also capitalising on a rebound in tech stocks as the Nasdaq Composite Index is again charging toward an all-time high.

Didi has tapped Goldman Sachs Group and Morgan Stanley as underwriters for its US listing which could value the company at as much as US$70 billion to US$100 billion, the sources said. It is raising US$1.5 billion through a revolving loan facility to shore up capital ahead of the share sale, Bloomberg News reported last week.

The startup is also exploring a potential dual listing in Hong Kong at a later time, a source added.

Didi, the Chinese version of Uber Technologies, acquired its US rival's China business in 2016. The SoftBank Group-backed company is stepping up efforts to grow its presence in strategically important sectors like autonomous driving and technologies like artificial intelligence chips. It has also just raised about US$1.5 billion for its on-demand trucking unit earlier this year, it was reported.

Separately, Singapore-based Grab has attracted backing from T. Rowe Price Group and Temasek Holdings for its planned merger with Altimeter Growth Corp, the sources said. The firms have expressed interest in joining a private investment in public equity offering, or PIPE, to support Grab's combination with the blank-cheque company, the sources said. BlackRock is also in talks to participate in the PIPE, which could raise about US$4 billion, they added.

At a valuation of more than US$34 billion, Grab's deal could become the biggest SPAC merger ever, according to data complied by Bloomberg, and would see the startup become one of the first South-east Asian unicorns to go public through a blank-check company.

Didi and Grab are set to test investor appetite for the capital-intensive ride-hailing business. Uber, which raised US$8.1 billion in an IPO in 2019, saw its share dive in March 2020 as the pandemic led to lockdowns in major cities globally. The stock has since quadrupled and even reached a new high in February this year.

Details of Didi and Grab's listings could still change as deliberations continue, the sources said. Representatives for Didi, Grab, Goldman Sachs and Morgan Stanley declined to comment. BLOOMBERG