Ant Group set to raise record-breaking £34bn at IPO

Ant Group is set to raise up to $34.4 billion in what will be the largest stock market debut to date.

The dual listing in both Shanghai and Hong Kong, would value Ant at around $312 billion, with options for a 15 per cent overallotment of shares.

The Hong Kong offering to institutional investors was oversubscribed one hour after launch, according to Reuters, with several prospective investors placing orders worth at least $1 billion in the first hour.

Headquartered in the Chinese city of Hangzhou, the financial technology group - which includes Alibaba and Alipay in its ecosystem - is aiming to raise about $17.2 billion in Shanghai and roughly the same in Hong Kong.

Around 80 per cent of its domestic offering is earmarked for 29 strategic investors that will be locked up for at least one year.

A wholly-owned unit of Alibaba has agreed to purchase 44 per cent of the Shanghai float. Shares are expected to start trading in Hong Kong and Shanghai on 5 November.

The group’s Chinese listing would eclipse the record set there previously by Agricultural Bank of China’s $10.1 billion float in 2010. The record in Hong Kong was set by AIA’s $20.5 billion offering the same year.

Jack Ma, the founder of Ant and affiliate Alibaba Group, said it was a “miracle” that such a large listing was taking place outside New York.

Recent regulatory filings revealed Ant's revenues to be 72.5 billion yuan ($10.5 billion) in the first half of this year, compared to 120.6 billion yuan ($17 billion) for the whole of 2019 - with profits of 18 billion yuan ($2.5 billion).

Alipay still accounts for much of Ant's revenues, with the mobile payment app claiming over a billion annual active users, with $16 trillion in transactions last year.

Digital payments and merchant services accounted for 43 per cent of revenues, while its credit platform accounted for 34.7 per cent, the investment platform brought in 14.1 per cent and its insurance offering 7.4 per cent.

Proceeds from the Initial Public Offering will be used to expand cross-border payments and boost research and development, according to the filing.

The news comes at a time of rising tensions between Beijing and Washington over issues including China's handling of the Coronavirus, Hong Kong security laws and their ongoing trade dispute.

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