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China halts world’s largest IPO, citing major regulatory issues

Author : Pankaj Singh | Published Date : 2020-11-05 

As per the latest news, China has suspended the USD 37 billion listing of Ant Group, which had been planned to be the world’s largest Initial Public Offering (IPO), one day after regulators grilled the company’s top executives including Jack Ma, who is the founder of the company.

China’s biggest financial technology firm was set to list in Shanghai and Hong Kong on Thursday in an IPO that had attracted massive interest from small investors and institutions. Details of the discussions weren’t made public but a statement from the Shanghai stock exchange said that there had been “other major issues in IPO filing’, including changes in ‘the fintech regulatory environment’.

This material event may cause the firm to fail to meet the listing and issuance conditions or information disclosure requirements, it added. As a result, the market operator has decided to suspend the scheduled listing, promoting Ant Group to put the Hong Kong leg on hold as well.

For the record, Ant Group owns Alipay, one of the leading payment firms in China, alongside other subsidiaries. Ant was spun out of Chinese e-commerce giant Alibaba, which possesses a one-third stake in the fintech powerhouse. It is considered as the world’s highest-valued financial technology firm and most valuable unicorn company.

In fact, this listing had been anticipated to confirm Ant’s status as one of the world’s largest companies by valuation, with an anticipated market value of over USD 310 billion before shares started trading. It means it would rival the valuation of the world’s renowned investment bank JP Morgan.

Meanwhile, this news about the company’s IPO is on hold in both Hong Kong and Shanghai caused a sell-off of Alibaba shares. This afternoon, Alibaba stock price decreased 8% due to the delayed offering and news that Ant had run into regulatory issues with the government of china.

Source credit - https://www.theguardian.com/business/2020/nov/03/biggest-share-offering-in-history-on-hold-as-ant-group-suspends-launch

About Author

Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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