Ant Group logo at headquarters
Source: The Economic Times

Beijing gives initial nod to revive Ant IPO after crackdown cools
Ant aims to file preliminary prospectus as soon as July-sources

Ant Group logo at headquarters
Source: The Economic Times

Jack Ma’s Ant Group has received the initial nod from the Chinese Leadership for the revival of its initial public offering (IPO). Ant is an affiliate of the e-commerce giant of China, Alibaba Group Holding. It is aiming to file a preliminary prospectus mainly for the share offering in Hong Kong and Shanghai by July.

However, the fintech company would require to wait for guidance from the China Securities Regulatory Commission on the particular timing of the filing. In a statement, Ant specified however that there was no plan for relaunching the IPO. In November 2020, the fintech giant’s stock market listing was suddenly shelved at the behest of Beijing. It was valued at about $315 billion then, and had plans to raise $37 billion, marking a world record.

“Under the guidance of regulators, we are focused on steadily moving forward with our rectification work and do not have any plan to initiate an IPO,” Ant said on its WeChat account late on Thursday.

The company clearly wants to keep the revival plan of the IPO under the wrap until a formal announcement comes in. This is following it gathering some regulatory attention in 2020 when it first attempted at the IPO. Pulling the plug on it, the authorities cracked down on Jack Ma’s empire following his speech in Shanghai that year alleging financial watchdogs of stifling innovation. This derailment went on to spread to other parts of the Chinese tech industry.

Easing efforts from China:

Liu He, the Chinese Vice-Premier informed tech executives in May that the government was in support of the sector’s development, would support them pursuing listings overseas or in China. On the other hand, Didi Global, the Chinese ride hailer is in talk to purchase a third of a state-backed EV company. This comes following reports from this week specify how Chinese regulators are on the verge of concluding their investigation on ride hailer.

Reports suggested how the top securities regulator had set a team for the reassessment for Ant’s share sale plans. Later on, however,  the regulator stated how they had not conducted any study on Ant’s IPO plans. The regulators went on to direct the fintech company to restructure as finance firm and not a tech firm. According to analysts and sources, the financial sector generally carries lower valuations.

“The size of Ant and the IPO will have to be smaller than what was planned in 2020 because the market conditions have changed and cannot be compared to now,” said Dickie Wong, executive director of Kingston Securities in Hong Kong.