Daily Management Review

China's Didi expects market cap of $67B at its IPO in New York


Chinese holding company Xiaoju Kuaizhi, which owns taxi service Didi, held a quick roadshow ahead of Wednesday's IPO on the New York Stock Exchange. According to its results, the company has priced its initial public offering at $14 a share.

Alex Proimos
Alex Proimos
Chinese taxi service Didi Global (Xiaoju Kuaizhi Holding), which goes public on the New York Stock Exchange on Wednesday, June 30, has priced its upcoming IPO at $14 per share. The company made that valuation following its roadshow, during which it sold more shares than it had planned, The Wall Street Journal (WSJ) wrote, citing people familiar with the company's latest moves to potential investors.

The company has sold more shares than it had planned, although the size of the new deal was not immediately available to WSJ. Given the rise in price per share, Didi's market capitalisation would be more than $67bn, lower than the valuation at the time of going public of US taxi order aggregator Uber Technologies (about $95bn), but well ahead of the market value of Uber's rival Lyft (about $20bn). Lyft went public in March 2019; Uber held an IPO in the second half of that year. Didi's full valuation including restricted shares will exceed $70bn at the initial public offering price. 

How the IPO goes depends in part on how the company persuades investors to focus on Didi's potential growth and put aside possible political risks associated with investing in Chinese companies listed in the US. The US IPO market has been less welcoming to new listed Chinese companies recently, the WSJ notes. Didi has allocated about a third of its IPO funds in advance for the roadshow. Morgan Stanley Investment Management and Temasek Holding are the so-called anchor investors that planned to buy $1.25bn worth of shares in the IPO.

source: wsj.com