Jack Ma's Ant Group IPO Faces Delay Of Over Six Months: FT

Alibaba Group Holding Limited BABA-backed Ant Group’s initial public offering and dual listing in Hong Kong and Shanghai could be delayed by at least six months, the Financial Times reported Thursday.

What Happened: On Tuesday, the listing, which would have raised $37 billion, was suspended by the Shanghai Stock Exchange after Chinese regulators announced draft regulations that could force Ant Group to rework its business model. A person familiar with the matter described "these new regulation changes" to FT as a key factor for Ant.

Lawyers associated with the listing reportedly said that the Jack Ma-co-founded fintech firm would have to submit a new IPO prospectus in Hong Kong and respond to the demands of Chinese regulators, which could take at least six months.

Why It Matters: The changes required of Ant could change its risk profile, whose current activities involve being a bridge between borrowers and banks, noted FT.

A Shanghai-based fund manager told FT that the value of Ant “depends” on the extent to which the new rules are implemented. “If they get strictly carried out, Ant would be worth less than half of what it is now,” the fund manager said.

China reportedly scuttled Ant’s IPO hopes due to its concerns regarding financial stability and as a response to controversial statements Ma made in Shanghai last month.

Price Action: Alibaba shares closed nearly 2.7% lower at $287.75 on Thursday.

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