Ant Group is unlikely to proceed with a market listing in the near future, Chinese state media said on Saturday, discounting reports from earlier this week that the Jack Ma-backed conglomerate was working up to a Hong Kong initial public offering (IPO).
Ant will need to assess internal and overall market conditions and will also need to ensure that any attempted listing is legal and in keeping with regulations, state-run China Daily reported, citing a person with knowledge of the matter.
Once an illustrious Chinese technology giant, Ant is emerging from a near three-year–long regulatory crackdown that started with the shelving of its planned mega IPO in November 2020.
At the time, Ant was planning dual IPOs in Hong Kong and Shanghai, which would have valued the group at a whopping $315 billion, and made it the most valuable company in the world.
Two days before launch, however, Chinese authorities derailed those plans, citing concerns around the company’s lucrative online lending business.
The regulatory crackdown that followed, expanding to the rest of China’s big tech firms and wiping $1.1 trillion off their combined value, is now showing signs of dissipating.
Earlier this month, China’s central bank imposed a $1.1 billion fine on Ant and announced that “most of the prominent problems for platform companies’ financial businesses have been rectified.”
A day after the central bank announcement, Ant announced a surprise share buyback, valuing the group at $78.54 billion, a steep 75% discount from its abandoned IPO.
Investors have since hoped that the regulatory easing would pave the way for Ant to re-launch its IPO.
Media reports this week said the Alibaba affiliate was looking at excluding its blockchain, database management services, and international businesses from a main entity that will be used to apply for a financial holding licence in China.
Once the restructuring is complete and Ant secures the licence, it can prepare for a public listing in Hong Kong instead of reviving the dual Shanghai-Hong Kong listing plan, they added.
However, citing these reports, China Daily said “it is unlikely that Ant will re-list in the short term.”
- Reuters, with additional inputs from Vishakha Saxena