Jack Ma with president Cyril Ramaphosa (Elmond Jiyane, GCIS)

  • Ant Group, the Chinese fintech founded by billionaire Jack Ma, is planning to go public in what could be one of the largest IPOs ever.
  • In a press release issued on Monday, Ant said it plans to go public via a dual-listed IPO in Shanghai and Hong Kong. The company did not say it would list shares in New York.
  • The possible slight to New York comes after tensions between China and the US have increased, in part due to the fraud exposed at US-listed Luckin Coffee, and the subsequent fall in its stock that nearly wiped out shareholders.
  • Ant Group operates Alipay, a popular digital payment network that was spun off from Alibaba.
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Ant Group, the Chinese digital payment network that was spun off from Jack Ma's Alibaba, is planning to go public in what could be one of the largest IPOs ever.

According to a Monday press release, Ant said it plans to go public via a concurrent listing on stock exchanges in Shanghai and Hong Kong, with no mention of a New York listing.

Ant said the planned IPO "will help the company accelerate its goal of digitizing the service industry in China and driving domestic demand, as well as position the company to develop global markets with partners and expand investment in technology and innovation."

Ant Group operates Alipay, the world's biggest online and mobile payments platform, and Yu'e Bao, once the world's largest money-market fund.

On Monday, Vodacom confirmed that it is partnering with Alipay to launch a new payment app in South Africa.

One beneficiary of the Ant IPO is Jack Ma's Alibaba, which acquired a 33% stake in the fintech company in 2019 after spinning it off years earlier. Alibaba jumped as much as 4% to $257.67 in Monday trades.

READ | Vodacom plans a 'super app' for payments in SA - in partnership with a Chinese giant

The IPO could be one of the biggest ever. According to a report from Reuters earlier this month, Ant was targeting a valuation of over $200 billion (R3.34 trillion), well above its 2018 valuation of $150 billion (R2.5 trillion) during its last funding round.

If Ant sells 10% of the company in the IPO, it would generate $20 billion in proceeds, which would place it third in terms of the largest IPO deals ever, just behind Alibaba's $22 billion IPO and Saudi Aramco's $25 billion IPO.

The decision to not list its shares in New York may have to due with rising tensions between the US and China. In addition to the conflict related to China's increasing and controversial control over Hong Kong, the fraud exposed at China-based Luckin Coffee has put a sour taste in investors' mouths related to Chinese stocks.

In May, Luckin Coffee was found to have falsified financial records and inflated revenue, which led to a weeks long halt of shares. Luckin Coffee plummeted as much as 80% on the news. That led the US Senate to pass a bill that would require overseas firms that list their shares in the US to follow US standards for audits and financial regulation.

If the bill becomes law, it could result in the delisting of many Chinese stocks in the US.

According to The Wall Street Journal, citing a person familiar with the matter, Ant is hoping to list its shares later this year.

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