A new record in the global stock market.
This time, though, it’s not in the US.
The Chinese Ant Group, the e-commerce giant Alibaba’s financial affiliate, would raise $34.5 billion in its dual initial public offering after setting the price for its shares this Monday.
It makes it the biggest IPO of all time.
According to regulatory filings, it’s listing its shares on the Hong Kong Stock Exchange at 80 Hong Kong dollars ($10.32) and at Shanghai’s Star Market at 68 yuan ($10.13).
Ant shares are expected to start trading in Hong Kong and Shanghai on November 5.
That means the Chinese billionaire Jack Ma, Alibaba’s founder, would break the record for the largest IPO for the second time.
In September 2014, Alibaba made history with its debut on NYSE, raising $25 billion and earning the title of the biggest IPO ever.
Saudi Aramco broke Alibaba’s record in December 2019, when it raised $29.4 billion when the state oil giant began trading its shares on Saudi Arabia’s stock exchange, Tadawal.
The Ant’s IPO deal would value the company at more than $313 billion, which is more than the Industrial and Commercial Bank of China, the world’s biggest bank by assets, according to Reuters.
Ant is reshaping the Chinese financial system.
It was born in 2004 with Alipay, a payment app, as a service for Alibaba’s clients to pay for their orders on the giant e-commerce site.
Today, though, Alipay is used throughout the world.
Monthly, more than 700 million people use the app in more than 80 million businesses. Ant processed $17 trillion in transactions in the 12 months ending in June only in mainland China.
Just to put in perspective, Visa payment volume is about $9 trillion a year — globally. And PayPal has around 325 million active users.
And nowadays, Alipay is just part of Ant, which allows anyone with a mobile phone in hand to invest their savings, buy insurance, or request a loan with Ant’s partners, who are established players.
In exchange for matching its users with these financial firms, Ant earns a fee. These fees represented 63% of its revenue in the first half of this year.
Ant probably didn’t follow Alibaba to list in the US because of the White House and Beijing’s deteriorating relations.
It means the US retail investor will not be able to invest in the Ant Group IPO and negotiate its shares.
Indirectly you have some options, like investing in ETFs that track the Hong Kong and Shanghai indices.
There is also a possibility that, in the future, Ant Group can pursue a listing on Wall Street as well.