Jack Ma’s (馬雲) Ant Group (螞蟻集團) is seeking to raise at least US$35 billion in its initial public offering (IPO) after assessing early investor interest, people familiar with the matter said, putting the Chinese fintech giant on track for a record debut sale.
Ant lifted its IPO target based on an increased valuation of about US$250 billion, up from previous estimates of US$225 billion, said the people, who asked not to be identified discussing private matters.
It was earlier expecting to raise at least US$30 billion, people familiar have said.
Ant’s simultaneous listing in Hong Kong and Shanghai might mark the biggest IPO ever, topping Saudi Aramco’s record US$29 billion sale.
Ant could exceed Bank of America Corp’s market capitalization and be more than twice the size of Citigroup Inc. Among US banks, only JPMorgan Chase & Co is bigger at US$300 billion.
Ant on Friday received a nod from regulators in Shanghai to proceed with its public share sale.
In the wake of its IPO plans, the company has been hit by a flurry of new regulations aimed at reducing risks in China’s online finance sector. Regulators have curbed small-loan funding sources, capped lending rates, and imposed new capital and license requirements on Ant and other conglomerates.
The Hangzhou-based company is seeking a hearing with the Hong Kong stock exchange on Thursday to clear the next key hurdle, the people said.
Ant declined to comment in an e-mailed statement.
Ant generated 72.5 billion yuan (US$10.7 billion) in revenue in the first half, after full-year sales of 120.6 billion yuan last year, it said.
The firm posted a 21.1 billion yuan profit in the first half of this year.
Ant, which grew out of the Alipay (支付寶) payments app, now gets the bulk of its revenue from providing quick consumer loans, fueling China’s growing consumer spending.
It also runs an insurance business and money market funds, on top of providing credit scoring and technological services for the finance industry.
Alipay has 711 million active users, mostly in China, who tap it to buy everything from a quick coffee to even property, generating US$17 trillion in payments in the 12 months through June.
For those who do not have ready cash to spend via Alipay, Ant operates services that dole out small unsecured loans: Huabei (Just Spend) and Jiebei (Just Lend). The former focuses on quick consumer loans for purchases of Apple Inc’s iPhones and fridges, while the latter finances anything from travel to education.
Ant uses some of its capital for these loans, but the bulk of the money comes from banks, with the firm acting as a gateway. The platforms made loans to about 500 million people in the 12 months through June, charging annualized rates on its smaller loans of about 15 percent.
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