Beijing gives initial nod to revive Ant IPO after crackdown cools

FE Team | Published: June 10, 2022 22:48:02

HONG KONG, June 10 (Reuters): China's central leadership has given billionaire Jack Ma's Ant Group a tentative green light to revive its initial public offering (IPO), two sources with knowledge of the matter said, in the clearest sign yet Beijing is easing its crackdown on the tech sector.
Ant, an affiliate of Chinese e-commerce behemoth Alibaba Group Holding Ltd, aims to file a preliminary prospectus for the share offering in Shanghai and Hong Kong as early as next month, the sources said, declining to be named due to the sensitivity of the matter.
The fintech giant will need to wait for guidance from the China Securities Regulatory Commission (CSRC) on the specific timing of the prospectus filing, said one of the sources.
In a publicly released 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 company's stock market listing was hastily shelved at the behest of Beijing in November 2020. At the time, it was slated to be valued at around $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 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.
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 with the waves the offering created as the world's largest ever equity float, a separate source with direct knowledge of the matter said.
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, wiping billions off market capitalisations and triggering layoffs at some firms.
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 to help it meet a growth target of 5.5 per cent, 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. Any data out of China lately has been dreadful because of lockdowns and the last thing they want to do is compound that issue. In the next three to six months we are likely to see China's crackdown unwound," 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.
Chinese Vice-Premier Liu He last month told tech executives the government supported the development of the sector and will back firms pursuing listings at home and abroad.