Alibaba Group Holding Ltd (NYSE:BABA) payments service provider Ant is planning to go public in a public offering that could raise $30 billion. Headquartered in Hangzhou, the payment service provider came into being, in 2004 and has close ties to Alibaba founder Jack Ma.
Alibaba, which is listed in the U.S, owns a33% stake in Ant, which also acts as the flagship payment service in its e-commerce platform. Ant has risen to become a heavyweight in the payment business at a time when online shopping is big business as consumers shun brick and mortar retail outlets. Together with Tencent, Ant processes close to $28.8 trillion of payment transfers every year.
Going public appears to be the next step in Ant financials bid to affirm its dominance in the payment business. The company is yet to confirm the amount of shares it intends to issue and at what price as it seeks to raise $30 billion.
While the company is eyeing close to $30 billion in the proposed IP0, a market capitalization of between $250 billion and $300 billion would make it bigger than most American banks. Likewise, a sale of shares equating to 10% or 15% would make the IPO the biggest in history.
China Listing Impact
Ant is planning to go public in China and will list in the Nasdaq-like Shanghai Stock Exchange. Listing in China comes hot on the heels of soaring tension between the U.S and China. The U.S has threatened to delist a number of Chinese companies over concerns of their close ties to the communist party.
The U.S President has already signed two executive orders banning viral video-sharing app TikTok, which has its roots from China through ByteDance. The U.S has also barred Huawei from carrying out any operations in the country over national security concerns.
Similarly, Ant opting to go public in China is a big boost to China’s financial service industry. China is looking to decouple from the U.S amidst the soaring tensions as it looks to become the alternative to U.S exchanges worldwide. A successful listing in China could open the doors for other tech giants to list outside the U.S.