Fintech

Ant Group Said to Revive IPO in Latest Sign of Easing Tech Crackdown

 

Ant Group is likely to revive its controversial initial public offering (IPO) as China’s leaders ease off on their crackdown on the tech sector, according to media reports.

Billionaire Jack Ma’s fintech group aims to file a preliminary prospectus for the share offering in Shanghai and Hong Kong as early as next month, sources told Reuters.

However, Ant will need to wait for guidance from the China Securities Regulatory Commission (CSRC) on the specific timing of the prospectus filing.

In a statement, Ant said there was no plan to relaunch its IPO, without elaborating. It did not respond to Reuters request for comment on whether it had received a green light from Beijing.

The regulator also poured cold water on the revival. “The China Securities Regulatory Commission has not conducted evaluation and research work in this regard, but we support eligible platform companies to list at home and abroad,” CSRC said in an answer to a reporter’s question.

The company’s stock market listing was hastily shelved at the behest of Beijing in November 2020. At the time, the group was valued at about $315 billion and planned to raise $37 billion, which would have been a world record.

“Under the guidance of regulators, we are focused on steadily moving forward with our rectification work and do not have any plan to initiate an IPO,” Ant Group said on its WeChat account late on Thursday.

Neither the CSRC nor China’s State Council Information Office, which handles media queries for central leaders, responded to Reuters’ request for comment.

 

Low-Profile IPO Plans

Ant wants to keep the IPO revival plans low profile pending a formal announcement, after having attracted regulatory glare in its first attempt back in 2020.

Chinese authorities pulled the plug on the IPO and cracked down on Ma’s business empire after he gave a speech in Shanghai in October 2020 accusing financial watchdogs of stifling innovation.

The IPO’s derailment marked the start of a regulatory crackdown to rein in China’s huge homegrown technology sector, which spread to other industries, including property and private education.

With its economy slowing in a politically sensitive year when Xi Jinping is expected to secure an unprecedented third term as party leader, Beijing is looking to loosen it grip on private businesses including tech giants such as Ant Group.

Beijing needs to meet a growth target of 5.5%, something economists have said will be hard to reach given Covid-19 lockdowns.

“They are rolling back on their crackdown to counterbalance the lockdown they’ve had,” said David Madden, market analyst at Equiti Capital in London.

A revival of the IPO may also mark a rehabilitation of sorts for Ma, who has been maintaining a low public profile since Beijing swooped.

 

  • Reuters, with additional editing by Neal McGrath

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.

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