Connect with us

Hi, what are you looking for?

Economy

China’s Didi raises $4.4 bln in upsized US IPO — sources

Chinese ride hailing company Didi Global Inc. raised $4.4 billion in its US initial public offering (IPO) on Tuesday, pricing it at the top of its indicated range and increasing the number of shares sold, according to two sources familiar with the matter. 

Didi sold 317 million American Depository Shares (ADS), versus the planned 288 million, at $14 apiece, the people said on condition of anonymity ahead of an official announcement. 

This would give Didi a valuation of about $73 billion on a fully diluted basis and $67.5 billion on a non-diluted basis. 

The decision to increase the deal size came after the Didi investor order book was oversubscribed multiple times, one of the sources said. The company is expected to debut on the New York Stock Exchange on June 30. 

Didi did not respond to a request for comment. 

Didi’s IPO is more conservative versus its initial aim for a valuation of up to $100 billion, Reuters has previously reported. The size of the deal was cut during briefings with investors ahead of the IPO’s launch. 

Investors balked at the $100 billion target given concerns the company’s future growth prospects could be curbed by the chance of greater regulation of the ride-sharing sector by transport authorities in the future. 

There was also uncertainty over how an antitrust probe into Didi, revealed by Reuters this month, would impact the business. Didi said at the time it would not comment on “unsubstantiated speculation from unnamed source(s).” 

The listing, which will be the biggest US share sale by a Chinese company since Alibaba raised $25 billion in 2014, comes amid record and volatile IPO activity this year as firms rush to capture the lucrative valuations seen in the US stock market. 

“The volatile IPO environment helped to lower (Didi) IPO price and valuation looks attractive,” said Douglas Kim, a London-based independent analyst, who writes on Smartkarma. 

Didi’s IPO was covered early on the first day of the book-build last week and the investor books were closed on Monday, a day ahead of schedule. 

An over-allotment option, or greenshoe, exists where another 43.2 million shares can be sold to increase the deal size. 

DIDI HISTORY
Didi was co-founded in 2012 by former Alibaba employee Will Wei Cheng, who currently serves as the chief executive officer. Cheng was joined by Jean Qing Liu, a former Goldman Sachs banker and the current president of the ride-sharing company. 

The company counts SoftBank, Uber Technologies Inc and Tencent as its main backers. 

Didi is also known for successfully pushing Uber out of the Chinese market after the US company lost a price war and ended up selling its China operations to Didi for a stake. Liu Zhen, the head of Uber China at the time, is Didi’s Liu’s cousin. 

Didi is the dominant player in China, although ride-hailing services by automakers such as Geely and SAIC Motor are picking up market share. In Europe and South America, where Didi is expanding, Uber has a presence. 

Like most ride-hailing companies, Didi had historically been unprofitable, until it reported a profit of $30 million in the first quarter of this year. 

The company reported a loss of $1.6 billion last year and an 8% drop in revenue to $21.63 billion, according to a regulatory filing, as business slid during the pandemic. 

Its shares are due to start trading under the “DIDI” symbol.  Echo Wang, Anirban Sen and Scott Murdoch/Reuters 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

Manila and nearby cities would go back to the strictest lockdown level from Aug. 6 to 20 amid a fresh surge in coronavirus infections...

Economy

The Philippine central bank will keep a supportive monetary policy amid a slower-than-anticipated economic recovery, its governor said on Friday.  “High-frequency indicators suggest that...

Economy

The Philippine central bank raised P100 billion on Friday as it fully awarded its short-term securities, with yields rising due to concerns about a...

Economy

The Securities and Exchange Commission (SEC) on Friday launched a new office under its Corporate Governance and Finance Department (CGFD) that will focus on...

Economy

Consumer foods maker Universal Robina Corp. said on Friday that its snacks and biscuits joint venture based in Australia and New Zealand is to...

Economy

PHILEX MINING Corp. reported an 86% increase in its second-quarter net income to P599.53 million on the back of sustained levels of metal output...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Economy

THE Securities and Exchange Commission (SEC) has warned the public from investing or to stop any investment in a group named Maxxprofit Computer Trading...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!