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However, Didi has not officially confirmed the IPO plans and a planned schedule has not been drafted.
Chinese ride-hailing giant Didi is set to perfect its Initial Public Offering (IPO) plans in 2021 but not with a New York Exchange as it has decided to pitch tent with the Hong Kong Stock Exchange. Per an exclusive report from Reuters, the initial public offering plans by the Chinese ride-hailing company Didi has commenced with consultations being made with investment banking outfits.
The move to debut its listing in Hong Kong instead of the United States follows from the harsh grip Chinese companies are continually facing from President Trump’s administration. The harsh bite from the administration has placed Chinese outfits including Huawei Technologies, ByteDance, and others under such sanctions as to limit their free business operations. A similar fate is expected for other top Chinese firms with extensive operations in the U.S. and Didi appears unwilling to be caught up in such a fate.
According to sources who spoke to Reuters anonymously, Didi aims to target a massive valuation of US$60 billion, a figure it hopes to beat by conducting a private funding round just before the IPO. The economic plunge as seen in recent times has caused the shares of Didi trading on the secondary private market at a valuation well below the all-time high of $56 billion it recorded about three years back.
According to Reuters, the sources also adduced the choice of the Hong Kong stock exchange over those in New York to the underperforming nature of similar ride-hailing companies such and Uber Technologies Inc (NYSE: UBER) and Lyft Inc (NASDAQ: LYFT). The share value of both companies has plunged since their respective IPO debuts and the latter has particularly plunged by about two-thirds its price upon listing.
Chinese Didi Has Strategic Alliance Ahead of Its IPO
The Chinese based ride-hailing company Didi has formed a series of strategic alliances since it was established about eight years ago. The partnerships span both the private and public sectors positioning itself as one of the important entities powering the Chinese economy.
Coinspeaker reported back in July that Didi was set to join the trial for the testing or trial of China’s Central Bank Digital Currency using its digital platforms. Reuters also noted the interwoven partnership between Didi and Uber as both companies have a stake in each other’s companies. Uber sold part of its operations to Didi and got a 17.5% stake in Didi while the Chinese based firm, in turn, reportedly pumped $1 billion into Uber’s operations. This means that any growth in one of the two companies will translate to a boosted income for the other and vice versa.
Didi has not confirmed the IPO plans and a planned schedule has not been drafted. The sources however noted that the IPO plans are subject to unpredictable market conditions.