China’s biggest ride-hailer, Didi Global Inc, on Wednesday raised $4.4 billion by pricing its shares at $14 each in its upsized New York initial public offering (IPO), according to public filings
According to Dealogic, a financial markets platform offering integrated content, analytics, and technology via a service to financial firms, with the raising of about $4.4 billion from the IPO, the ride-hailing company has the biggest Chinese IPO in the United States since Alibaba’s $25 billion offering in 2014.
Analysts forecast that the raised $4.4 billion from the Wednesday’s offering would give the company a valuation of more than $67 billion.
Despite the impressive yield by the company’s IPO in New York, analysts believe that Didi’s listing on Wall Street is coming at a delicate time given the political and regulatory headaches it may have to contend with
A news report by CNN Business indicated that Didi, which forced Uber out of mainland China five years ago, had attracted scrutiny from regulatory authorities in China, where the nation’s tech sector is undergoing a historic crackdown.
For instance, in April, the ride-hailer was one of 34 companies summoned for a meeting with the State Administration for Market Regulation (SAMR), where executives were told to put an end to any anti-competitive behavior and ordered to carry out internal inspections.
This is even as Reuters reported that this month, Didi was being investigated for antitrust concerns.
According to the report, which cited anonymous sources, Didi was being probed by SAMR about whether it had “used any competitive practices that squeezed out smaller rivals unfairly.”
When asked for its reactions to the probe issue, Didi was quoted as stating at the time that it would “not comment on unsubstantiated speculation from unnamed sources.”
While the company is also making a splash in New York amid significant US-China tensions, China is cautioning its tech giants to heed ' warning' and heed ‘warning’ in Alibaba’s record fine
CNN Business further reported: “While many major Chinese tech firms trade in the United States, including Alibaba (BABA) and JD.com (JD), the environment has gotten more volatile in recent years.
“Lately, a flurry of Chinese companies listed on Wall Street, have held secondary offerings in Hong Kong so they can establish stronger roots closer to home, with some citing worsening regulatory hurdles in the United States. Some, like China Mobile and China Telecom, have been kicked off US exchanges altogether.
“Despite the tensions, 2020 still saw some $12 billion raised by Chinese companies from US listings, according to data provider Refinitiv. Almost $8 billion has been raised by Chinese firms so far in 2021, more than triple the amount reached at the same point last year.
“Didi is emblematic of both trends. Its upcoming debut will mark one of the top 10 US listings over the past decade, as well as the fourth-largest US IPO by a Chinese company on record, according to Dealogic.
“But in recent months, the company has also considered a dual listing in Hong Kong, according to a person familiar with the matter”, the news medium added.
Didi, which was founded in Beijing in 2012 by former Alibaba manager Cheng Wei, who created a cab service provider known as “Didi Dache,” which means taxi-hailing in Mandarin, is ubiquitous in China, boasting 377 million annual active users in the country alone.