Ant Group to launch $35bn IPO after clinching regulatory approval

China’s Ant Group has won the final nod from the country’s top securities watchdog for the registration of its Shanghai offering, clearing the last regulatory hurdle for its $35bn dual-listing initial public offering (IPO), the China Securities Regulatory Commission said on Wednesday.

Ant, the fintech company backed by Chinese e-commerce group Alibaba Group Holding, plans to list simultaneously in Hong Kong and Shanghai in the coming weeks, sources have said.

The listing could be the world’s largest IPO, surpassing the record set by Saudi Aramco’s $29.4bn float last December. The IPO would also be the first simultaneous listing in Hong Kong and on the year-old STAR Market in Shanghai.

Ant is set to conduct price consultations for the Shanghai offering on October 23 and will set the price on October 27, as per its updated prospectus filed with the local exchange.

The fintech group aims to split the share offering evenly between Hong Kong and Shanghai, selling up to 1.67 billion on each exchange. That would represent up to 11 percent of its enlarged share capital, before a 15 percent greenshoe or over-allotment option is exercised, the prospectus showed.

Strategic investors who agree to accept a 12-month lock-up on investments in Ant’s STAR IPO will account for 80 percent of the domestic float. Among them are Zhejiang Tmall Technology, a wholly-owned unit of Alibaba, which has committed to purchasing 730 million shares, according to the prospectus.

The share sale plan comes after the China Securities Regulatory Commission accepted the registration of Ant’s domestic float on the Nasdaq-style STAR Market, as part of the local rules. The company filed its preliminary prospectus in late August.

Proceeds will be used partly to support Ant’s digital economy business and to enhance its research and development capabilities.

Ant, China’s biggest mobile payments company, reported an operating income of 118.2 billion yuan ($17.78bn) in the nine months leading up to September – up 42.6 percent from year earlier, as per the prospectus.

Nine-month gross profit rose 74.3 percent to 69.5 billion yuan ($10.4bn).

Hangzhou-based Ant on Monday also won approval from the Hong Kong Stock Exchange for the offshore leg of its IPO, Reuters news agency reported.

For the Hong Kong leg, Ant plans to start a brief premarketing period this week before opening order books next week. Its shares are likely to start trading a few days after the November 3 United States presidential election, sources have said.

After receiving initial feedback from potential investors, Ant is looking to increase its offering size to $35bn from up to $30bn, targeting a valuation of about $250bn or more, Reuters news agency has reported.

If completed, Ant’s IPO would significantly burnish Hong Kong’s status as a capital markets hub, with $28.8bn worth of IPOs and secondary listings between the start of this year and mid-October, Refinitiv data showed.

That helped Hong Kong to take the second spot in the global stock exchange league table – after Nasdaq – despite fallout from the coronavirus pandemic and anti-government protests.

Ant does not plan to offer a cornerstone tranche in Hong Kong in anticipation of strong demand from institutional investors, Reuters news agency reported.