Ant Group may sell more shares in Shanghai than Hong Kong in IPO: report

By Eliza Gkritsi

Fintech giant Ant Group plans to raise more money through its listing on the Shanghai tech board than its simultaneous debut in Hong Kong, Reuters reported citing sources with direct knowledge of the matter.

Why it matters: Ant Group’s initial public offering (IPO) is expected to rake in $30 billion and could be one of the biggest listings of the year.

  • Raising the majority of its funds in Shanghai would be a big win for the budding year-old STAR Market.

Details: The breakdown of the total float between the Shanghai and Hong Kong stock exchanges has not been decided. But after feedback from investors, Ant Group is looking to sell more shares in Shanghai, according to Reuters.

  • Ant Group’s IPO managers were asking Chinese institutional investors to potentially commit between RMB 1 billion to RMB 1.5 billion ($146 million to $219 million), as well as agree to hold their shares for a year, the report said.
  • The company set a placeholder of RMB 48 billion for the Shanghai listing in its filing.

READ MORE: Ant Group IPO filings: five key takeaways

Context: Ant Group has not disclosed key details for the dual listings including the timetable, total float, and number of shares. It is looking to sell between 10% and 15% of its total shares.

  • Its IPO filings revealed fast growth in revenues and profits. The fintech company has made more profit in the first half of 2020 compared with the whole of 2019.
  • Companies listings on the STAR Market made $10.3 billion in the first seven months of 2020, Reuters reported citing data from research firm Refinitiv. This makes the tech board the second-biggest market in the world.
  • China is looking to lure homegrown tech giants away from listing abroad with the Shanghai tech board featuring relaxed listing rules.
  • Similar reforms are also underway in Shenzhen. The bourse in China’s tech manufacturing capital announced last week that it will allow dual-class shares.
  • Following the Luckin Coffee scandal and amid rising US-China tensions, US-listed Chinese tech companies are under increasing scrutiny.