China’s central bank governor recently noted that there was a possibility for Ant Group to successfully list in a second IPO attempt following the high-profile pullout in November last year.
According to the governor of the People’s Bank of China (PBoC) Yi Gang, regulating Ant Group was «a complicated issue» but he renewed hopes for a listing should the legal issues be resolved.
«You just follow the standard of legal structure, you will have the result,» Yi said during a virtual session at the World Economic Forum Davos Agenda 2021.
Yi added that while financial innovation has been beneficial for financial inclusion and lower transaction costs, there were risks to consider such as consumer protection and misuse of monopoly power.
Second Attempt
Unlike the originally planned $35 billion IPO, Ant Group’s second attempt at a listing will be faced with more investor scrutiny, particularly regarding its final form after restructuring to comply with antitrust rules.
The most notable concern is the risk of a breakup which the PBoC had previously signaled as a possibility should any non-bank provider fall into the definition of a digital payments monopoly.
Effects on growth outlook aside, market analysts estimate that Ant’s payment arm Alipay could already see its value halved under the draft regulatory proposals. The broader fintech group could see its overall valuation plunge to around $108 billion from the original $320 billion before the pullout in November and more downward pressure could follow should a breakup occur.
