China's ride hailing company Didi Chuxing raised about $4 billion in its IPO on the New York Stock Exchange (NYSE), priced at the top range. Based on the listing, Didi's market valuation will hit a record $67 billion.
Under the IPO Didi issued 288 million American Depository Shares (AD), priced at $14 each, equivalent to 72 million shares of Class A common stock on the NYSE.
It is the largest IPO by a Chinese firm in the US stock market since 2014 when Chinese internet behemoth Alibaba earned the title of the biggest IPO. It is also likely to be the largest IPO in the US market this year.
According to the company, 30 percent of the funds raised with the IPO will be used to expand international business outside China. Another 30 percent will go to enhance current technologies, and 20 percent will be on improvement of user experience.
Founded in 2012, Didi has launched operations in 14 countries outside China, hiring thousands of local employees across Africa, Asia-Pacific, Europe and Latin America. The company has consolidated a strong market position as one of the most popular ride-hailing platforms in Latin America and the second largest ride-hailing and food delivery platform in Mexico, in terms of total transactions in 2020, according to the China Investment Corporation and iResearch Consulting Group.
DiDi Headquarters in Beijing.
Didi's global platform provided services to over 493 million annual active users and managed an average of 41 million daily transactions for the previous 12 months ending on March 31, 2021, according to the listing prospectus.
In 2020, Chinese companies raised $12 billion from US listings, more than triple the funds raised in 2019, according to data from Refinitiv.
As of May 5, a total of 248 Chinese companies were listed on major US stock markets including NASDAQ and NYSE, up from 217 on October 2 last year, according to a report released on May 13 by the US-China Economic and Security Review Commission. During that period, 17 Chinese companies, including chipmaker SMIC and the China National Offshore Oil Corp, were delisted from US markets.
5th July Update:
Didi Chuxing has warned about the impact of a clampdown on its business just days after a US$68bn float on Wall Street. Chinese authorities warned the ride-hailing firm on Friday they were investigating the business and on Sunday banned it from app stores.
Didi, which operates predominately in China where it organises 20mln journeys daily, has been accused of illegally using personal data gathered from customers. China’s Cyberspace Administration (CAC) said: "After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information. The ban means Didi will not be allowed to sign up new users, though existing customers can carry on using the app as normal.
In a statement, Didi said: "The company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users' privacy and data security, and continue to provide secure and convenient services to its users.
Didi's shares fell by 5% on Friday to US$15.53
The float was the biggest Chinese listing in the US since the 2014 float of Alibaba and saw the company raise US$4.4bn in new money to fund overseas expansion plans.