The highly anticipated public debut of Ant Group is likely to be delayed in 2021 as China looks to overhaul and implement new rules and
regulations related to the fintech industry, according to a Bloomberg
report.
The initial public offering of Ant Group was abruptly put on hold by
Chinese regulators earlier this month. Investors were anticipating Ant
Group to raise up to $35 billion in what would have been the biggest IPO
in history.To get more
latest ant group news, you can visit shine news official website.
Ant Group is still in the "early stages" of examining changes that would
be required to appease regulators, Bloomberg said, citing regulatory
officials familiar with the matter.
"With so much work needed and some rules not yet spelled out, the
officials said the initial public offering may not get done before
2022," Bloomberg said.
The development is a blow to investors in Ant Group that were hoping to cash out with the IPO. Alibaba, which owns one third of Ant Group,
fell as much as 5% on Monday, representing the sharpest decline since
the IPO was delayed.
The big challenge Ant Group is facing is not only complying with the new
restrictions, but also ensuring that the fintech giant will "fall in
line" with the ever changing regulatory environment in China, according
to Bloomberg.
Ant Group is now regulated by a joint task force set up by China, led by
the Financial Stability and Development Committee, Bloomberg said.
Part of the new regulations would require Ant Group to hold more capital
on its balance sheet as it facilitates consumer loans. Bloomberg
estimated that Ant Group would require $12 billion in funds to regain
compliance with the new rules and regulations.
If the fintech giant is unable to complete its public debut before its IPO filing expires in October of 2021, the company would have to
restart the listing process with the Shanghai and Hong Kong exchanges.
The delay in Ant Group's IPO has led some analysts to slash its
valuation estimate in half, Bloomberg noted, serving a blow to those
expected to generate a windfall from the IPO, including investment banks
facilitating the deal.
