China’s Didi raises $ 4.4 billion in US IPO

  • Didi sold 317 million ADS, more than expected 288 million -sources
  • Sells ADS at $ 14 each – sources
  • Would give Didi a valuation of $ 73 billion on a fully diluted basis

June 29 (Reuters) – Chinese rideshare company Didi Global Inc (DIDI.N) raised $ 4.4 billion when it went public in the United States on Tuesday, placing it at the top of its stated range and increasing the number of shares sold, according to two sources familiar with the matter.

Didi sold 317 million U.S. Depository Shares (ADS), up from the expected 288 million, at $ 14 apiece, the people said on condition of anonymity before an official announcement.

That would give Didi a valuation of around $ 73 billion on a fully diluted basis. On an undiluted basis, it will be worth $ 67.5 billion. The company is scheduled to debut on the New York Stock Exchange on June 30.

The increase in trade size came after Didi’s investor order book was repeatedly oversubscribed, one of the sources said.

Investors have been urged to expect their orders to be cut once allocations end on Wednesday, according to a separate source with direct knowledge of the matter.

Didi did not respond to a request for comment.

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

Didi’s IPO is more cautious than its initial target of a valuation of up to $ 100 billion, Reuters previously reported. The transaction amount was reduced during briefings with investors before the launch of the IPO. Read more

This suggests that investors are increasingly worried about China’s potential antitrust crackdown and a more volatile IPO environment around the world in 2021, said Douglas Kim, an independent analyst. based in London, who writes on Smartkarma.

“But it seems that many investors like this deal, the volatile environment of the IPO has helped drive down the price of the IPO and the valuation looks attractive,” Kim told Reuters.

Didi’s IPO was hedged early on the first day of the book’s construction last week, and investors’ books were closed on Monday, a day ahead of schedule. Read more .

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

DIDI’S STORY

Didi was co-founded in 2012 by Will Wei Cheng, a former employee of Alibaba, who is currently managing director. Cheng was joined by Jean Qing Liu, former Goldman Sachs banker and current chairman of the ridesharing company.

The company counts SoftBank (9984.T), Uber Technologies Inc (UBER.N) and Tencent (0700.HK) as its main funders.

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

Like most rideshare companies, Didi was historically unprofitable, until it posted 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 plummeted during the pandemic.

Its shares are expected to begin trading under the symbol “DIDI”.

Reporting by Echo Wang in New York and Anirban Sen in Bengaluru and Scott Murdoch in Hong Kong; Editing by Greg Roumeliotis, Bill Berkrot and Himani Sarkar

Our standards: Thomson Reuters Trust Principles.


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