Ant to lift IPO funding target to RM143.5b

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HONG KONG • Jack Ma’s Ant Group Co Ltd is seeking to raise at least US$35 billion (RM143.5 billion) in its IPO after assessing early investor interest, people familiar with the matter said, putting the Chinese financial-technology giant on track for a record debut sale.

Ant lifted its IPO target based on an increased valuation of about US$250 billion, up from previous estimates of US$225 billion, said the people, who asked not to be identified discussing private matters. It was earlier expecting to raise at least US$30 billion, people familiar have said.

Ant’s simultaneous listing in Hong Kong and Shanghai may mark the biggest IPO ever, topping Saudi Aramco’s record US$29 billion sale. Ant could exceed Bank of America Corp’s market capitalisation, and be more than twice the size of Citigroup Inc. Among US banks, only JPMorgan Chase & Co is bigger at US$300 billion.

Ant received a nod from regulators in Shanghai last Friday to proceed with its public share sale. In the wake of its IPO plans, the company’s been hit by a flurry of new regulations aimed at reducing risks in China’s online finance sector. Regulators have curbed small-loan funding sources, capped lending rates, and imposed new capital and licence requirements on Ant and other conglomerates.

The Hangzhou-based company is seeking a hearing with the Hong Kong stock exchange on Thursday to clear the next key hurdle, the people said. Ant declined to comment in an emailed statement.

Ant has picked China International Capital Corp Ltd, Citigroup, JPMorgan and Morgan Stanley for its Hong Kong sale.

Ant generated 72.5 billion yuan (RM43.5 billion) in revenue in the first half (1H), after full-year sales of 120.6 billion yuan in 2019, it said. The firm posted a 21.1 billion yuan profit in the 1H of this year.

Ant, which grew out of the Alipay payments app, now gets the bulk of its revenue from providing quick consumer loans, fuelling China’s growing consumer spending. It also runs an insurance business and money market funds, on top of providing credit scoring and technological services for the finance industry.

Alipay has 711 million active users, mostly in China, who tap it to buy everything from a quick coffee to even property, generating US$17 trillion in payments in the 12 months through June.

Ant uses some of its capital for these loans, but the bulk of the money comes from banks, with the firm acting as a gateway. The platforms made loans to about 500 million people in the 12 months through June, charging annualised rates on its smaller loans of about 15%. — AFP

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