The initial public offering (IPO) of Ant Group, founded by Jack Ma, may not hit the market before 2023, according to a report.

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Regulators thwarted Ant Group's $35 billion listing in November last year on both Shanghai and Hong Kong exchanges just two days before its debut. The listing was touted as the world's biggest stock market debut.

According to a Bloomberg report, the registration for the IPO is set to expire on Wednesday. Meanwhile, bankers have stopped receiving regular communication from the firm.

According to the bankers, regulatory hurdles need to be overcome before the IPO hits the market.

Regulators are also not likely to give a go-ahead to the IPO without the approval of President Xi Jinping himself. Several officials at the Shanghai Stock Exchange have already been questioned for expediting Ant’s sale process, the report said quoting anonymous sources.

“For Ant and its investors, the uncertainty remains and the pain is not ending anytime soon,” Dong Ximiao, chief researcher at Zhongguancun Internet Finance Institute, told Bloomberg.

According to employees at the firm’s Hangzhou headquarters, regulatory compliance is now a priority for the fintech company. An employee suggested that state ownership could be the best solution.

Placing a government representative within Ant to keep a tab on the company has been on the cards.

Company officials did not respond to the requests sent by Bloomberg. Bankers Citigroup, JPMorgan and Morgan Stanley also declined to comment on the matter.

Ant is now planning to form separate ventures from the fintech company with the help of state-backed partners, the report said.

The company has stepped up efforts to overhaul operations to meet stringent regulatory requirements. Regulators have provided broad guidelines to Ant for overhauling its sprawling operations. As part of the process, Ant has ramped up its capital base to 35 billion yuan ($5.4 billion). The company had received regulatory approval on September 30 to boost its registered capital base from 23.8 billion yuan.

The fintech giant has also agreed to turn into a holding company that will be regulated like a bank.

Apart from this, Ant plans to restructure its two lending arms -- Jiebei and Huabei -- into a new consumer finance unit with a registered capital of 8 billion yuan.

It will also create a new app for its loans business, separate from Alipay, a person familiar with the matter told Bloomberg.

Ant will shift data on consumer transactions to a new joint venture with state-owned firms. The venture is likely to allow rivals to check borrowers’ credit worthiness for fee.

The crackdown on Ant is part of Beijing’s move to end the domination of heavyweights and create “common prosperity.”

The restrictions have brought down Ant’s valuation to a fraction of its former self. Fidelity Investments has cut Ant’s valuation estimate to nearly $78 billion as of June 30. BlackRock valued the company at $174 billion, while T Rowe Price Group estimated valuation at $189 billion. Before the IPO was halted, Ant’s pre-money valuation stood at $280 billion.

“Ant Group’s business model risks collapse on a reported forced split-up from its Alipay and credit-product apps. Credit profit would more than halve, with group valuation plunging to $71.5 billion, we calculate,” Francis Chan, banking & fintech analyst, told Bloomberg.

(Edited by : Bivekananda Biswas)

First Published:Oct 20, 2021 2:58 PM IST