Ant Financial — the finance affiliate of Alibaba Group Holding Ltd. — is eyeing an IPO on Shanghai’s main board for some time later this year, according to reports. The public offering could be China’s largest since 2010, according to two people familiar with the matter.
Zhejiang Ant Small & Micro Financial Services Group Co. — better known worldwide as Ant Financial — is the owner of China’s most popular payments platform, Alipay, and the manager of Yu’E Bao, the nation’s largest money market fund.
Currently, Ant is targeting a private round of fundraising for at least $3.5 billion at a valuation of about $60 billion. The firm is reportedly seeking a dual listing in Shanghai and Hong Kong, though that would require regulatory approval.
“China doesn’t have an Internet company of this scale and influence, so it could enjoy a significant premium in value if it lists in the country,” said Li Muzhi, a Hong Kong-based analyst at Arete Research Services LLP. “A lot of the potential retail investors are also Ant Financial’s users.”
Ant Financial declined to comment in an emailed statement.
To be eligible to list in China, a firm must be profitable for three years and acquire profits of 30 million yuan ($4.6 million). Ant meets these requirements comfortably, as well as the regulation that, to IPO, a firm must generate accumulated cash flow of at least 50 million yuan or post a total of 300 million yuan for revenue in the latest three years.
At $60 billion, Ant would be the largest IPO on the mainland since 2010 and another big coup for owner Jack Ma, who set a record on the New York Stock Exchange with the Alibaba IPO. Alibaba originally targeted a Hong Kong IPO, but the city would not waive a ban on multiple share-class structures.
Alibaba is entitled to a stake of about one-third of Ant Financial with regulatory approval, according to a 2014 filing to the U.S. Securities and Exchange Commission. Alibaba has perpetual rights to 37.5 percent of the finance arm’s pre-tax earnings until it acquires the stake, the filing said.