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China’s Didi raises $4.4 B in massive U.S. IPO

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Chinese ride-hailing company Didi Global Inc (DIDI.N) raised $4.4 billion in its U.S IPO on Tuesday, pricing it at the top of its indicated range and increasing the number of shares sold, as per reliable sources.

Didi sold 317 million American Depository Shares (ADS), versus the planned 288 million, at $14 apiece, the source said on condition of anonymity ahead of an official announcement, which would give Didi a valuation of about $73 billion on a fully diluted basis. On a non-diluted basis, it will be worth $67.5 billion.

The increase in deal size came after the Didi investor order book was oversubscribed multiple times, one of the sources said.

Investors have been told to expect their orders to be scaled back once allocations are completed on Wednesday, according to a separate source with direct knowledge of the matter.

The listing, which would be the biggest US share sale by a Chinese company since Alibaba raised $25 billion in 2014, comes amid record IPO activity this year as companies seek to capture the attractive valuations seen in the US stock market.

The company was co-founded in 2012 by former Alibaba employee Will Wei Cheng who currently serves as the chief executive and counts Softbank, uber, and Tencent as its main backers. Chinese companies have seen several anti-trust-related crackdowns and a more volatile IPO environment globally in 2021.

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.

In China, the approach to Big Tech firms leans, increasingly, toward regulation. And that might make investing in China’s marquee names, especially on other shores, a bit fraught. After all, Wall Street, when it comes to gauging the prospects of eCommerce and apps and disruption, lives on growth.

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

The company is expected to debut on the New York Stock Exchange on June 30.

Didi did not respond to a request for comment.

 

 

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