Tech company Ant Group, backed by Alibaba founder and billionaire Jack Ma, is expected to make the largest IPO ever recorded worldwide.
Ant Group priced its shares at $10.32 on the Hong Kong Stock Exchange and $10.26 on Shanghai's Star Market and will be able to raise around $34.4 billion.
What is Ant Group?
Ant is an online payments business that operates Alipay, the biggest online payment system in China, where cash, checks and credit cards have long been dominated by electronic payment systems and apps.
According to Alipay, the total volume of payments on its platforms in China is at $17.6 trillion for the year ending in June. In Alibaba's most recent annual report, it revealed that Alipay has 1.3 billion users, most of whom are in China.
Last year, Ant Financial launched a new international version of Alipay allowing tourists and business travelers to use mobile payments in mainland China. The availability of the Alipay service helped travelers to China access the country’s massive cashless economy, where everyone from taxi drivers to luxury malls have come to rely on mobile payments.
Following the launch, Alipay tweeted: "We heard you. You want to use @Alipay and guess what? Now you can! Visitors to China are now able to #PayWithAlipay. Simply download @Alipay via app stores to start enjoying wallet-free travel! That QR code by the cashier will no longer be a foreign sight."
Aside from payment systems, Ant also provides wealth management, insurance and money transfer services.
Eurasia Group senior geotechnology analyst Xiaomeng Lu pointed out that Ant is also expected to benefit from the Chinese government's latest economic development plans.
Lu said: "Ant is being viewed as this national technology champion — it's investing in AI, it's investing in blockchain." She added that these are Chinese President Xi Jinping's priorities.
Largest IPO
The share price was set by advisers to Ant amid reports of very strong demand from major investors. Ant will only sell approximately 11% of its shares but the IPO will boost the the whole business' value to about $313 billion.
This Ant offering will be higher than the previous record for an IPO captured by Saudi Arabia's state oil company Aramco when it raised $29.4 billion on the Riyadh exchange last December.
With the shares sale, Ma's holdings in Ant will be worth around $17 billion, increasing his net worth to nearly $80 billion, solidifying his status as China's wealthiest man.
Chinese tech firms going domestic
With the US government applying pressure on Chinese firms by limiting their access to US technology, China has called on its flagship tech companies to list on domestic stock markets.
The most recent of these listings are NetEase and JD.Com, who have already raised billions by selling their shares via the Hong Kong stock market.
At a conference in China, Ma mentioned that the Ant IPO would be very important for Shanghai and Hong Kong.
He said: "This was the first time such a big listing, the largest in human history, was priced outside New York City. We wouldn't have dared to think about it five years, or even three years ago."
