Ant Group | Business Upturn

China’s Ant Group plans to sell some of its stake in Paytm

Aryan Jakhar — Sat, 25 Feb 2023 03:54:33 +0000

According to people familiar with the situation, Ant Group Co. is considering selling a portion of its stake in Paytm, the Indian financial technology startup’s operator.

According to the persons who asked not to be identified since the topic is confidential, the Chinese fintech behemoth has been contemplating ways to lower its interest in One 97 Communications Ltd. after its share price passively climbed due to share buybacks.

The talks are preliminary, and specifics may alter based on regulatory and pricing issues, according to the sources. Ant did not reply immediately to emailed demands for comment. Paytm declined to respond.

The discussions follow the sale of Ant subsidiary Alibaba Group Holding Ltd.’s stake in Paytm, as the e-commerce giant reduced its stakes in India amid rising geopolitical concerns. According to the individuals, Ant’s selling would be for technical reasons rather than political ones.

Ant owned 24.86% of One 97 in December, but its stake increased to more than 25% after the repurchase lowered the number of shares outstanding, according to one of the sources. According to the individual, Ant has a 90-day window once the repurchase concludes on February 13 to reduce its ownership. In December, One97 announced a repurchase of up to 8.5 billion rupees ($100 million).

While Ant intends to withdraw, Sunil Mittal, an Indian telecoms mogul, is pursuing a stake in Paytm by combining his financial services arm into the fintech giant’s payments bank, according to individuals familiar with the situation.

Mittal wants to merge Airtel Payments Bank and Paytm Payments Bank in a stock transaction, and he also wants to purchase Paytm shares from other holders, according to people who asked not to be identified because they were sharing private information. The talks are still in their early stages, and Airtel and Paytm may not reach an agreement, according to the sources.

Ant has invested in ten fintech wallets outside of mainland China with the goal of creating an Asian payment network.

In China, Ant is waiting for approval to apply for a financial holding company licence, which will allow it to continue its fintech operations. As a sign of progress, authorities recently approved an increase in capital for the firm’s consumer lending unit.

Billionaire Jack Ma, who has mainly kept out of the public eye, has stated that he will relinquish management of Ant as part of a larger retreat but will retain ownership of the firm.

Why is China’s 5th richest Jack Ma quitting his $150 billion worth Ant Group?

Dipankar Ray — Thu, 28 Jul 2022 19:26:09 +0000

Multi-billionaire Jack Ma is reported by Wall Street Journal, to plan to step down from Chinese Tech Giant Ant Group of Companies, a conglomerate that he had founded. The news comes in after Ant Group has been trying to separate its associates from Alibaba Group of holdings as Chinese regulators intensify scrutiny.

In the present scenario, Jack Ma does not hold a direct seat on the board of the company nor does he have any executive role in the company but he still owns 50.52% of the company shares through a private entity where he is the majority stakeholder. Reports published by WSJ suggest that Jack Ma might hand over the reins to some of the senior executives at the company including CEO Eric Jing which would decrease his hold over the company. Ant Group confirmed that these are part of his efforts to improve “corporate governance”. On Tuesday seven Ant Group executives stepped down from the Alibaba partnership including CEO Eric Jing.

Thus, this is primarily reasoned as Ant Group trying to disassociate itself with the Alibaba Group. Moreover, in terms of Financial Regulations which exist in the People’s Republic of China.

China’s tech crackdown has disrupted its financial markets. Thus, China has enforced strict regulations on its tech platforms over the past year.

Hence, Ant Group is only protecting itself and the legacy created by its founder Billionaire Jack Ma.

Alibaba and Ant Group are trying to sever their ties. As both the companies had ended their agreements which had given Alibaba an edge. With this the company is trying to reduce its dependence on Jack Ma.

Paytm’s ₹18,300 crores IPO could launch between November 8-10: Report

Cheryll Jain — Wed, 27 Oct 2021 08:47:24 +0000

Digital payments and e-commerce company Paytm is reportedly set to float the biggest Initial Public Offer in the Indian capital markets in at least a decade between November 8 to November 10. A source familiar with the matter disclosed that the company has filed a Red Herring Prospectus (RHP) with the (Registrar of companies) to schedule the launch of the offer between the two dates.

Meanwhile, another source has stated that Paytm’s anchor placement is scheduled for November 3, and will see participation from large global institutional investors.

Paytm’s planned IPO will surpass the Rs 18,000 crore mark after it was earlier reported that the company is looking to increase its IPO size by Rs 1,000-2,000 crore due to surging demands.

The Fintech major has thereafter increased the issue size from Rs 16,600 crores to Rs 18,300 crores. The increase of Rs 1,700 crore will reportedly be fully through the Offer for Sale which will now amount to Rs. 10,000 crores and the primary capital raise component will remain fixed at Rs 8,300 crore.

China’s Ant Group, the largest shareholder in Paytm that owns a stake of a little over 29 per cent in the company, is expected to administer nearly 50 per cent of the secondary share sale through the OFS. Ant Group would sell shares worth up to around Rs 5,000 crore, bringing its stake to below 25 per cent in One97 Communications, the parent firm of Paytm.

Japan’s SoftBank, Elevation Capital and Paytm founder Vijay Shekhar Sharma will be among the other shareholders to sell part of their stakes in the Rs 10,000 crore OFS.

Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JP Morgan, Citi and HDFC Bank are the investment firms working on the IPO according to Paytm’s DRHP filed before the Securities and Exchange Board of India.

Sources have estimated that Paytm is looking to achieve a total valuation of around $20 billion to $22 billion with the planned IPO. On the other hand, Bloomberg has pegged Paytm’s valuation at $25-$30 billion following the offer issuance.

Ant Group shelves share buyback programme for current and departing staff: Bloomberg

Chirag Jha — Tue, 02 Mar 2021 09:11:28 +0000

Jack Ma’s Ant Group Co has shelved a share buyback programme for current and departing staff, partly because of uncertainty over how to value the company, Bloomberg News reported on Tuesday, citing executives familiar with the matter.

Ant suspended a share buyback program for current and departing staff in July to prepare for the IPO, people familiar with the decision said but has thus far struggled to revive it in part because of uncertainty over how to value the company.

The moves underscore two intertwined challenges facing Ant: The fintech giant’s future is still shrouded in doubt due to an ongoing lack of regulatory clarity, and the risk of employee discontent is rising. Ant is bracing for departures after it pays bonuses in April, people familiar said, asking not to be named discussing private information.

Few doubt that the company’s prospects have worsened dramatically since China began tightening regulations on the fintech sector, but the opacity surrounding the new rules have made it difficult to put a number on the damage. Bloomberg Intelligence analyst Francis Chan, for instance, has lowered his estimate for Ant’s valuation three times since the IPO was scuttled. He now pegs the company’s net worth at less than $108 billion, about 60% lower than the level implied by Ant’s listing plan in November.

Where is Jack Ma? Is he really missing or is he arrested?

Arjun Kalia — Tue, 05 Jan 2021 18:14:22 +0000

The disappearance of the founder of one of the largest e-commerce companies has triggered many conspiracy theories with netizens wondering about his whereabouts. Reportedly, it’s been 2 months since Alibaba’s founder has not been seen in the public, the same time he had hit out on the national regulators through his blunt speech.

Some conspiracy theories suggest that Ma has been put under house arrest while others suggest that he has been arrested by the Chinese regulators. China has a history of not unveiling information on arrests of big personalities, so there are chances of these theories turning true. Well, these are just speculations.

The point to note here is that it’s not the first time that Chinese billionaires have suddenly disappeared, this has happened a few times before especially during China’s infamous anti-corruption drive between 2016 and 2017 when many of them were arrested and the whereabouts of a few are still not known. It was in the month of December 2020 when China’s State Administration for Market Regulation (SAMR) had started an investigation on Alibaba Group for alleged monopoly conduct.

It was in September 2018 that Jack Ma had announced his retirement and had decided to devote his time to philanthropy, travelling and rural education and said “Alibaba is but one of my dreams. I’m still young” in an event, so there is a slight possibility that maybe the billionaire is keeping a low profile and has hit the road to achieve his other dreams.

While Jack Ma is missing the Chinese authorities are already tightening a grip over his business empire, including the Ant Group whose $37 billion IPO was suspended after receiving the green light from the Chinese Securities watchdog.

The scrutiny has led to a slump in Alibaba’s shares by a quarter since the peak, wiping over $10 billion from his fortune and resulting him to fall to the third place on the list of China’s wealthiest people.

According to the Bloomberg Billionaires Index, Ma’s current net worth is estimated at $50.1 billion.

Where is Jack Ma, is he missing?

Arjun Kalia — Mon, 04 Jan 2021 08:14:20 +0000

It’s been more than two months that the founder of Alibaba Group Jack Ma has not made a public appearance. People were doubtful about his whereabouts since the time Jack Ma failed to show up as a judge in the final episode of his own talent show, Africa’s Business Heroes, where he was replaced by an Alibaba Executive. Ma’s hectic schedule was cited as a reason for his absence by an Alibaba spokesperson.

The 56-year-old billionaire hasn’t made a public appearance since the time he delivered a controversial speech in Shanghai on 24th October in which he complained about how China’s regulators and state-run banks are hampering opportunities.

“Today’s financial system is the legacy of the Industrial Age,” Ma said in the speech. “We must set up a new one for the next generation and young people. We must reform the current system,” he said.

Chinese authorities are already tightening a grip over his business empire, including the Ant Group whose $37 billion IPO was suspended after receiving the green light from Chinese Securities watchdog, with the Shanghai Stock Exchange saying that the Ant Group had reported significant issues such as the changes in financial technology regulatory environment.

US veteran investor Mark Mobius said that the move was designed so as to curtail financial institutions from getting too big.

In the past, there have been a few such incidents where Chinese billionaires have suddenly disappeared especially during China’s infamous anti-corruption drive between 2016 and 2017.

Alibaba shares drop by 9% as buyback plan fails to halt stock

Divya Joyce — Tue, 29 Dec 2020 09:41:40 +0000

Alibaba shares dropped 9% to lowest since June on Monday, as the firm’s upsized $10 billion buyback programme failed to ease concerns about a regulatory crackdown on co-founder Jack Ma’s e-commerce and financial empire. A sharp sell-off over two sessions has knocked almost $116 billion off the tech giant’s Hong Kong-listed shares.

“The antitrust investigation into Alibaba has yet to specify the penalties, which is worrying investors a lot,” said Zhang Zihua, a chief investment officer of Beijing Yunyi Asset, adding a probe outcome could “greatly change” the company valuations.

The downward spiral intensified when Chinese regulators announced on Thursday the launch of an antitrust investigation into Alibaba and said they would summon its Ant Group affiliate to meet. Alibaba’s U.S. shares sank more than 15% during the day.

Putting investors more on edge was news over the weekend that China’s central bank had asked Ant to shake up its lending and other consumer finance operations.

Last month, Chinese regulators abruptly suspended Ant’s blockbuster $37 billion initial public offerings in Shanghai and Hong Kong, which was on track to be the world’s largest, just two days before its planned debut.

“The new regulations are hurting big internet platforms, so you see Tencent and other tech companies are also seeing their share prices going down,” said Li Chengdong, a Beijing-based tech analyst.

“Alibaba now is the target of the regulators so the reaction is stronger.”

These developments are part of a crackdown on monopolistic behaviour in China’s booming internet space in general, but Ma’s business empire in particular after he publicly criticized the regulatory system for stifling innovation.

Regulators have warned Alibaba about the so-called “choosing one from two” practice under which merchants are forced to sign exclusive cooperation pacts preventing them from offering products on rival platforms.

The State Administration for Market Regulation said on Thursday that it had launched a probe into the practice.

The gloom due to the regulatory crackdown overshadowed Alibaba’s decision, announced on Sunday to raise its share repurchase programme to $10 billion from $6 billion, effective for a two-year period through the end of 2022.

Alibaba shares could trade lower in the near term due to the “regulatory overhang”, Nomura said in a note on Monday.

But the cheaper value will be attractive for long-term investors, Nomura added as it kept a “buy” rating on Alibaba’s U.S.-listed stock and retained a target price of $361. The stock closed at $222 on Thursday.

China asks Ant Group to restructure in latest crackdown on Jack Ma

Ruchira Sonawat — Mon, 28 Dec 2020 06:19:34 +0000

In the latest blow to the internet giant Jack Ma, on Sunday, China’s Central bank disclosed that it has asked Ant Group Co Ltd to restructure its lending and other consumer finance operations. This has come more than a month after the regulators suspended Ant’s initial public offering in Hong Kong and Shanghai days after the antitrust authorities launched a probe into Alibaba Group Holding Ltd.

Regulators have urged Ant to rectify financial regulatory violations, including in its credit, insurance and wealth management businesses, and overhaul its credit rating business to protect personal information, People’s Bank of China (PBOC) Vice Governor said.

Ant said in a statement it would establish a “rectification” working group and fully implement regulatory requirements.

Regulators pointed out Ant’s issues including its poor corporate governance, defiance of regulatory demands, illegal regulatory arbitrage, the use of its market advantage to squeeze out competitors, and harming consumers’ legal interests, according to Pan.

China also warned internet giants this month to brace for increased scrutiny, as it slapped fines and announced probes into mergers involving Alibaba and Tencent Holdings Ltd.

China’s Ant considers selling Paytm stake amid territorial tensions with India

Shalmali Bhagwat — Wed, 02 Dec 2020 12:36:49 +0000

As reported by Reuters, Chinese fintech giant Ant Group is considering sale of its 30% stake of Indian digital payment processor Paytm, in backdrop of the tensions between the two Asian neighbours and a rising competitive landscape.

Financial details of the possible transaction have not been finalized yet and Ant has not commenced a formal sale process yet, four people aware with the matter told Reuters.

Both Ant and Paytm have denied the rumours. A Paytm spokesman said, “There has been no discussion with any of our major shareholders ever, nor any plans, about selling their stake.”

Ant’s possible exit from Paytm would mark another reversal for the Chinese company following the dramatic suspension of its $37 billion stock listing last month, which would have been listed in history as the world’s largest. It would also be a blow to its ultimate goal of becoming a global payments leader. Sources told Reuters in October that Ant was cutting its financial support to many of the overseas affiliated e-wallet firms.

The final push for Ant to consider the divestment of its stake in Paytm is traced back to the worsening diplomatic relations between India and China in the past few months, said the people, who declined to be named as the deliberations are confidential.

Relations between the countries are at their worst, with troops locked in a border face-off in the western Himalayas for months after a clash in June in which 20 Indian soldiers were killed, which further incited action from India in the form of tightened rules for investments from China and banning Chinese mobile apps. These included those from tech giants Tencent, Alibaba and ByteDance. It banned 43 more apps late last month.

Ant first invested in Paytm in 2015 and possesses its 30% stake in the firm via its parent company, One97 Communications, according to Ant’s initial public offering prospectus, which described the Indian firm as a major associate. In addition to the tighter investment rules for Chinese companies in India, tougher competition is likely another factor behind Ant’s calculations regarding Paytm, which is fast losing its dominance, two of the people said. Online transactions, lending and e-wallet services have only witnessed an upward graph in India, led by a government push to make the country’s cash-loving merchants and consumers adopt digital payments.

That has led to the entry and expansion of Facebook-owned WhatsApp, Alphabet Inc’s Google Pay, and Walmart’s PhonePe. Some domestic players are also eying expansion of operations.

Ant Group’s IPO suspended to safeguard consumer interest, says China’s central bank

Akanksha Yadav — Fri, 06 Nov 2020 08:19:55 +0000

China’s central bank’s decision to suspend billionaire Jack Ma’s Ant Group’s planned initial public offering was based on a comprehensive consideration about safeguarding the interests of financial consumers and investors, a bank official said on Friday.

China stopped Ant Group’s $37 billion listings on Tuesday, foiling the world’s largest stock market debut with just days to go which came as a severe blow to the financial technology and online consumer lending firm.

This step comes at a time when greater efforts are being made by Chinese policymakers to prevent systemic financial risks and curb rising debt. It has put the company and its investors into a disturbing spot and its executives are now in a race to fulfil tighter regulations.

“The decision was made in accordance with laws and regulations… and about maintaining stable, healthy market development in the long term,” Liu Guoqiang, deputy governor of the People’s Bank of China (PBOC), told in a statement.

“The CBIRC also supports this decision made by the Shanghai Stock Exchange,” Liang said. “Any listed company must comply with the requirements of relevant laws and regulations,” Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC) said while supporting Liu’s proposition.

Ant Group was all set to make its market debut in Hong Kong and Shanghai on Thursday.

Liang also emphasised that CBIRC is hoping that all business entities would “remain in compliance with laws and regulations when doing business with and cooperating” with Ant Group.

“We encourage the financial sector to explore reasonable innovation while put risks under control. At the same time, we will regulate fintech in accordance with its nature of finance, and include all financial activities into the regulatory framework” Liang added.

Ant group’s listing suspended by Chinese authorities

Shlok Arya — Wed, 04 Nov 2020 08:35:41 +0000

As the founder of Alibaba, Jack Ma was about to sell shares of Ant Group worth $37 billion on Thursday, making it the biggest stock market debut in the world the Chinese authorities suspended the listing at the eleventh-hour citing the reason due to major regulatory issues.

In the aftermath of the suspension, Alibaba saw a share price decline by 9.6 percent and 9.1 percent in Hong Kong and New York respectively. In 2014, Alibaba broke the record for the biggest stock debut in both the markets. The drop in share price erased nearly $76 billion off its value, twice the amount Jack Ma was planning to raise.

The Shanghai Stock Exchange in a statement said, “Mr Ma had been called in for supervisory interviews.”

Due to a change in the regulatory, Ant Group no longer meets the listing conditions or information disclosure requirements. As a consequence, it was decided to suspend Ant’s listing on the stock exchange.

The company was due to selling 11% of its shares at the price of $313 billion across the two stock exchanges. Last December, Saudi Aramco debuted with $29.4 billion, making it the largest listing in the world.

The firm’s executives along with Mr Ma were called in by Chinese authority for a discussion on regulating the sprawling fintech firm. However, the media reports are indicating that the meeting will address the comments made by Mr Ma at a fintech conference in October. In the conference, Mr Ma compared the merits of the digital banking system with the traditional “pawn shop.”

The company in a message to investors said, “Ant Group sincerely apologies to you for any inconvenience caused by this development. We will properly handle the follow-up matters in accordance with applicable regulations of the two stock exchanges.”

Shanghai stock exchange to review Ant Group’s application for IPO on September 18

News Desk — Wed, 09 Sep 2020 08:40:35 +0000

Chinese fintech firm Ant Group’s application for a local IPO will be reviewed on September 18, the Shanghai stock exchange said on Wednesday.

Ant is planning to list simultaneously in Hong Kong and on Shanghai’s STAR Market. Sources revealed it could be the world’s largest IPO.

Under the local rules, once the company goes through the listing committee’s hearing, it can then register the flotation with the country’s securities regulator before initiating the pricing consultation process.

Ant Group is the fintech arm of Chinese e-commerce company Alibaba Group Holding.