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The Didi Chuxing company, which went on sale, became the largest Chinese company to trade on US stock exchanges on Wednesday, following an initial public offering that received a strong response despite regulatory tensions.
Didi began trading at $ 16.65 per share, compared to its $ 14 IPO, which gave the company a market capitalization of $ 80.4 billion.
Didi raised $ 4.4 billion on a IPO on Tuesday, selling more shares than expected at the top of its price range. The IPO marked a reduction in initial expectations, after advisers had discussed raising up to $ 7 billion, said one person involved in the discussions.
Investors were quick to buy shares of the IPO in Didi’s marketed price range, following a quick show road that ended on Monday, people reported on the process. Investors based in Asia were expected to squeeze a large chunk of the supply, according to people.
Temasek, an existing investor in Didi, and Morgan Stanley, who was also a subscriber to the IPO, expressed interest in buying $ 1.25 billion worth of shares before the roadshow, according to a brochure.
The listing catapulted Didi to the forefront of Chinese companies trading in US markets, earning more money from the IPO of any Chinese issuer in the United States since Alibaba’s box office debut in 2014.
Investors seemed to put aside concerns about rising US-China tensions and the reduction of large technology companies in Didi’s home country. goal taken to prices and data practices in transport and freight transport.
Didi operates the dominant application for travel in China and has recently begun to expand into new markets, while also investing money in the development of electric vehicles and autonomous driving systems.
Unlike Uber in the U.S., Didi does not generate substantial revenue from delivery services, although its core business has been profitable since 2019 on an adjusted earnings basis before interest, taxes, depreciation and amortization. Earlier, investors valued Didi at $ 65 billion during a round of private financing in 2018.
Didi’s IPO followed the lists of several Chinese companies in the U.S., including cargo shipping company Full Truck Alliance and online grocery firm Dingdong. Shares of Full Truck Alliance have fallen since the company went public last week, giving it a market capitalization of less than $ 20 billion.
The listing will pave the way for large payments to Didi investors, including SoftBank’s Vision Fund, Uber and China’s Tencent.
SoftBank’s first Vision Fund, which sees Didi as its largest investment, would own a stake worth about $ 16 billion in the company’s opening price. Uber’s stake, obtained from an agreement in 2016 in which the US company abandoned its business in China, will be worth about $ 9.6 billion.
Goldman Sachs, Morgan Stanley and JPMorgan were the top insurers in Didi’s offering.
Additional reports from Tabby Kinder in Hong Kong
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