Jack Ma’s Ant raises IPO funding target to $35bn

The FinTech company lifted its IPO target based on an increased valuation of about $250bn, up from previous estimates of $225bn

Ant Group has raised its IPO funding target to $35bn on revised valuation of $250bn. Reuters 

Jack Ma’s Ant Group is seeking to raise at least $35 billion (Dh128.45n) in its initial public offering after assessing early investor interest, putting the Chinese FinTech giant on track for a record debut sale, according to sources.

Ant lifted its IPO target based on an increased valuation of about $250bn, up from previous estimates of $225bn, the sources said. It was earlier expecting to raise at least $30bn, they said.

Ant’s simultaneous listing in Hong Kong and Shanghai may mark the biggest IPO ever, topping Saudi Aramco’s record $29bn sale. Ant could exceed Bank of America’s market capitalisation, and be more than twice the size of Citigroup. Among US banks, only JP Morgan Chase is bigger at $300bn.

Ant received a nod from regulators in Shanghai on Friday 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 Thursday to clear the next key hurdle, the sources said. Ant declined to comment in an emailed statement.

Ant has picked China International Capital, Citigroup, JP Morgan and Morgan Stanley for its Hong Kong sale.

Ant, which grew out of the Alipay 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 $17 trillion in payments in the 12 months to 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 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  to the end of June, charging annualised rates on its smaller loans of about 15 per cent.