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Ant Group is expected to hold its IPO in Hong Kong, however, the details are still unclear.
Ant Group, an Alibaba affiliate and the company behind China’s largest digital payment platform Alipay, has received a green light to raise capital through an IPO on the Hong Kong stock exchange from the Chinese regulators, according to news outlet CNBC.
The negotiations on IPO was passed on Monday although the details are not fully known. Forward, the company needs to file a registration with the Chinese regulators before proceeding with a roadshow and the eventual pricing of the IPO.
With the IPO expected to raise over $30 billion, Ant Group’s total market capitalization will surpass the $200 billion level. Hereby setting a high pace for new fintech startups and also existing ones in the market.
Ant Group Ahead of HK IPO
Alibaba, which is owned and controlled by Jack Ma, has an approximate 33% stake in Ant Group. Ant Group has heavily invested in artificial intelligence to give it a cutting edge over its competitors. Apparently, with the Chinese government rolling out its digital Yuan that is seen as a huge competitor to Alipay, a recent survey by Reuters indicates customers are comfortable with the former and skeptical on switching to a new payment system.
Alipay which serves over one billion users and 80 million merchants, with total payment volume (TPV) transaction reaching RMB118 trillion in June 2020. With such huge support from its home customers, Ant Group puts China miles ahead of the leading global economy, the United States. Its success has perhaps raised eyebrows in Washington, where regulators are caught up in the upcoming presidential elections.
However, with Ant Group’s boisterous nature, it is set to take up other markets including Africa, greater Asia, Europe and others where the United States have less control.
Alibaba has seen tremendous success during the pandemic as it provided essential services needed to keep the economy running smoothly. According to metrics provided by MarketWatch, Alibaba Group Holding Ltd (NYSE: BABA) shares were up 44.98% year to date through Tuesday. In addition, they had added approximately 21.13%, and 12.9% in the past three months and one month respectively through Tuesday. Having been critically analyzed by 56 Wall Street experts, Alibaba shares received an average of Buy rating.
Its success has prompted the Trump administration to add Ant Group among Chinese companies blacklisted to trade in the United States. The Chinese counterparts are accusing the Americans of using the national security narrative to undermine and oppress foreign companies especially those from China.
However, several analysts are of the view that the United States’ decision to blacklist Ant Group will have minimal impact on the company’s success in the market.