High-networth individuals and domestic funds from India are eyeing a slice of the much-touted mega IPO of Chinese e-commerce giant Alibaba, which is looking to raise an eye-popping $21.1 billion.
Alibaba, founded by Chinese entrepreneur Jack Ma in his apartment, has garnered huge investor interest and appears set to exceed Visa Inc’s $19.7 billion IPO in 2008, the biggest US initial offering to date.
HNIs and fund managers in India have sounded out homegrown brokers to place orders with foreign financial partners to enable transactions when the IPO opens which could be as soon as next week, senior executives at various investment banking and brokerage firms said.
Alibaba and shareholders are offering over 32 crore American depository shares, valuing the company at more than $160 billion.
While US underwriters for a big issue give priority to large clients, many HNIs and funds are making all efforts to get some shares in the IPO.
The highly anticipated IPO of Alibaba, which runs Internet-based e-commerce businesses including B2B online web portals, is seeing robust global interest in line with Facebook Inc’s IPO — the biggest tech public offering so far.
Alibaba stock will be listed on the New York Stock Exchange under the symbol BABA. With most big IPOs seeing a decent pop on debut, investors are keen on getting some shares of Alibaba even if at higher end of price band (USD 66/share).
Indian investors can invest in Alibaba IPO via overseas trading accounts and some brokerages offer the facility to invest in various stocks that are traded on US exchanges, added market sources.
A strong rupee has emboldened Reserve Bank of India to relax some of the foreign exchange related restrictions including the individual overseas remittance limit of USD 75,000 per year which has been hiked to USD 125,000. These investments can include stocks.
Alibaba.com was the company’s first online commerce platform, launched in 1999. Alibaba.com is a leading English-language wholesale platform focused on supporting global trade.
Sellers on Alibaba.com are typically manufacturers and distributors based in China and other manufacturing countries such as India, Pakistan, the United States and Thailand, the company’s offer document said.
“Buyers on Alibaba.com are located in numerous countries all over the world, with the United States, India and Brazil being among the leading countries. Buyers are typically SMEs engaged in the import and export business, trade agents, and wholesalers, retailers and manufacturing companies,” it added.