Ant Group, the Chinese financial technology titan, is expected to raise around $ 34 billion if its shares start trading in Hong Kong and Shanghai in the coming weeks. This would make the IPO the biggest of all time.
The company, the parent company of Alipay's mobile payment service, valued its shares at around $ 10.30 each, according to documents released by the exchanges in both cities on Monday. At that price, the company would be valued at around $ 310 billion, a market value comparable to that of JPMorgan Chase and more than that of many other global banks.
The money Ant is raising would surpass the $ 29.4 billion Saudi Arabia's state-owned oil company Saudi Aramco raised when it went public last year. Ant's listing would also be larger than that of its sister company, Chinese e-commerce giant Alibaba, which raised $ 25 billion when its shares traded on the New York Stock Exchange in 2014.
For hundreds of millions of people in China, Alipay can also be a bank. It's your credit card, debit card, mutual fund, and even insurance broker – all on a single mobile platform. It's a small business lender, both online and offline, that could otherwise be ignored by China's big state-owned banks. Alipay has more than 730 million monthly users, more than double the number in the US. For comparison, PayPal has 346 million active accounts.
Like other giant internet companies, Ant says his strength is in doing a large number of different tasks at the same time. For example, the more people use Alipay to buy laths, the more data is collected about their purchasing power. Ant says this information will help offer loans, investments, and insurance policies that meet users' needs. The data also helps Ant and its partner banks determine who is likely to repay them.
However, the amalgamation of finance and technology is piquing regulatory interest everywhere, and Ant was not spared the audit. In recent years, China has severely curtailed fishy online lending and investment programs. Regulatory pressures have led Ant to moderate its ambitions in certain areas since it was spun off from Alibaba in 2011.
In the United States, Trump administration officials have debated whether to put the Ant Group on the entity list that bans foreign companies from buying American products, three people with knowledge of the matter said. In 2018, Ant announced an offer to buy money transfer company MoneyGram after failing to get approval from American officials.
Today the company emphasizes that Alipay is just the front door through which its users gain access to financial services. Lending and investing are still largely carried out by established institutions – a message that emerged when the company formerly called Ant Financial slipped the second word out of its English name this year.
Last year Ant made $ 2.7 billion in profits on $ 18 billion in sales. In the twelve months that ended in June, mainland China processed $ 17 trillion in digital payments.
Ana Swanson contributed to the coverage.