Ant Group’s IPO could be delayed more than 6 months amid regulatory pressure that may slash its valuation, report says

Ant Group
An Ant Group logo is seen at the company’s headquarters on October 28, 2020 in Hangzhou, Zhejiang Province of China.

General investors may have to wait up to 6 months to own a piece of Ant Group as regulatory pressure from Beijing ramps up, according to a report from the Financial Times,potentially further delaying its initial public offering. 

The Chinese fintech — which was set to go public this week in what would have been the largest IPO in history — could also see a reduced valuation as investor anxiety about what regulatory scrutiny the company may be exposed to is digested by investors, the FT reported, citing people directly involved in the deal.

Ant Group’s planned dual listing on the Hong Kong and Shanghai exchanges was suspended on Tuesday, a day after founder Jack Ma was summoned to meet with Chinese regulators.According to Reuters, regulators told Ma and two Ant Group executives that Ant’s “lucrative online lending business would face tighter government scrutiny.”

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Lawyers involved in the listing of Ant’s shares said the company would have to submit a new IPO prospectus and respond to regulators demands, which could take at least six months, according to the Financial Times.

“The key thing is these new regulation changes,” one person with direct knowledge of the deal said, according to the Financial Times.

The IPO was estimated to raise about $35 billion in proceeds for the company, and it attracted $3 trillion in retail bids.

Read the original article on Business Insider

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