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Ant Group's listing on track to raise $34.5B: RPT

Ant Group closed its Hong Kong institutional book building process a day earlier than expected due to strong demand for its record initial public offering. According to recent reports, the company’s IPO raised over $34 billion, making it the biggest IPO of all time. Yahoo Finance’s Akiko Fujita joins The Final Round panel to discuss.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round." A massive IPO for Ant. Jack Ma's company is reportedly planning to close its Hong Kong book early because that's how strong demand is for its IPO. Akiko, this is expected to be a record setting public debut, and it's expected to raise, what is it, just over $34 billion through its IPOs in Hong Kong, as well as listing in Shanghai.

It really, I think, just shows the power, I guess is one way to describe it, of the mobile payment system in China and also just the demand for this IPO, too, just reaffirming I think everything that we've been talking about over the last couple of months.

AKIKO FUJITA: Yeah, no question. This is going to be a huge one and one that's been anticipated for some time. $34 billion, that figure you just pointed to makes this the largest IPO in history. And we're talking about a dual listing. Both shares will be trading on November 5th. $17 billion raised on the Shanghai stock market, which is seen as a competitor to the NASDAQ. And then $17 billion roughly being raised on the Hong Kong exchange as well.

We're looking at prices at $10.27 a share in Shanghai, $10.32 in Hong Kong. This price would value the company at $313 billion, which would certainly put the valuation more in the category of a lot of these big tech companies we've been talking about, instead of the financial companies.

And just for some perspective here, that $313 billion would make this larger or more valuable than Citigroup or Goldman Sachs and pretty much on par with JPMorgan Chase. And a reminder, by the way, Jack Ma, who is a controlling shareholder in the company, remember that Alibaba-- the IPO back in 2014, which was the biggest at the time, that was just $25 billion. So you get the sense of the scope of what we're looking at here.

All of this points to a really interesting shift that we have seen over the last year, this IPO landscape shifting away from the US into the APAC region, not just because of the proximity of these listings or because of the political nature of what's been playing out between US and China, because the capital is also there. And we have seen those like the Hong Kong exchange make changes to their listing rules over the last several years in order to prepare themselves for a big tech IPO like this one.

Ant Group, of course, oversees the Alipay mobile platform. And it is a really big one here. We're talking about 730 million monthly users. Not just a payment and credit card service, but also used for mutual funds and insurance brokers, lenders to small businesses. They really have built out the whole financial ecosystem over in China.

Users are overwhelmingly in China, though. And that's going to be a big question for Ant moving forward, where their growth opportunities are outside of their home region. The US certainly is going to be a very difficult one, and this is something we've been talking about for some time. But the US government now looking at Ant Group, potentially listing that company on the entity list, that trade blacklist, even though they don't really have users in the US.

And then, of course, you look back to 2018 when CFIUS blocked that acquisition. Ant Financial, at the time, was hoping to acquire a money grant. So they've had a lot of headwinds in the US, but no question there has been huge growth over in Asia, and investors responding to that with the significant demand.

SEANA SMITH: Certainly, yeah, and again, we are expecting that IPO on November 5th. So next week, it's expected to debut. And of course, we also have the election on the 3rd, so big week coming up here for I guess investors everywhere all over the world, is that that's something that is safe to say, at least at this point. All right, Akiko, thanks for breaking that down for us.