Ant Group's Shanghai half of $34.4 billion IPO oversubscribed 872 times
02 November 2020
The domestic retail book of Ant Group Co Ltd’s $34.4 billion dual listing was 872 times oversubscribed as individual investors in China scrambled for a slice of the world’s largest initial public offer (IPO), a company filing showed.
Ant is poised to raise about $17.2 billion on Shanghai's STAR Market and roughly the same in Hong Kong, setting a new global record for IPOs. Against this, Saudi Arabian Oil Co’s (Saudi Aramco) $29.4 billion listing last December just scraped through.
Ant also will be exercising a greenshoe option for 15 per cent overallotment of shares. The group now sells 1.92 billion shares on the Nasdaq-style STAR Market, according to Ant's filing with the Shanghai exchange on Thursday.
After the greenshoe, the oversubscription equates to retail investment interest of about 19 trillion yuan ($2.83 trillion).
The company on Monday set the price of the Shanghai leg at 68.8 yuan ($10.27) per share. Before the greenshoe, it was offering 4 per cent of the initial 1.67 billion shares to mainly retail investors across the country, having earmarked 80 per cent of the domestic offering to 29 strategic investors who will be locked up for at least one year.
The remaining 16 per cent of the Shanghai leg had been allotted to non-strategic institutional investors who subscribed for about 76 billion shares, roughly 284 times the initial tranche, according to Ant’s filing on Monday.
The enthusiastic retail investor sentiment towards Ant’s record-setting float has triggered a clawback mechanism where heavy oversubscription from small investors can result in them receiving a greater share, Ant said in the latest filing.
After the greenshoe and clawback, the final allocation of the deal is about 70 per cent to strategic investors and the remainder split 12-18 per cent between institutional and retail investors, instead of 16–4 per cent as originally planned, as per the latest filing.
Ant opened books for the Shanghai float for one day on Thursday.
Investor demand is also strong for the Hong Kong leg, with Ant closing institutional order books one day earlier than planned.
The book was oversubscribed just one hour after launch on Monday, with the float stoking heavy demand for local currency and sending Hong Kong money market rates to five-month highs.
Application lists for the Hong Kong book close at 12:00 noon on Friday, 30 October 2020. Announcement of results of allocations in the Hong Kong public offer (including successful applicants’ identification document numbers, where appropriate) will be available through a variety of channels from Wednesday, 4 November 2020, Ant stated in a filing.