Chinese Ride-Hailing Giant Makes its US Debut

DiDi Begins Trading in the US

DiDi (DIDI) a Chinese ride-hailing company, went public yesterday, selling shares in a deal that values it above $67 billion. Shares priced at $14 each ahead of the IPO. DiDi raised $4.4 billion, making it the second-largest US listing by a Chinese company ever. Alibaba (BABA), the Chinese ecommerce giant, raised $25 billion in its IPO in 2014.

Many Chinese companies are pursuing dual listings in the US and Hong Kong recently. Chinese companies raised $12 billion via US listings in 2020, and have raised nearly $8 billion so far in 2021.

China Tech Companies Face Strict Regulations at Home

Chinese companies are facing increased regulation at home and abroad. Chinese authorities are cracking down on the technology sector in particular.

This spring, DiDi was among a group of 34 countries told by the State Administration for Market Regulation to rein in anti-competitive practices and conduct internal inspections of operations. DiDi is currently being investigated by SAMR over allegations that it used its position to tamp down smaller rivals. The firm is the leading ride-hailing company in China with 377 million annual active users. It counts Apple (AAPL), Alibaba (BABA), and other large companies as investors.

DiDi Steps on the Gas

DiDi’s public debut came three business days after the company launched its roadshow with investors. To expedite the process, DiDi held round-the-clock virtual meetings with investors. Executives sold investors on DiDi’s size and growth potential, noting that 70% of China’s population will live in cities by 2030. Few of them will own cars, which will increase demand for DiDi’s services.

To speed up the road show, DiDi also lined up investors ahead of time for one-third of the IPO allotment. It also priced its IPO prudently, which ultimately led to it being oversubscribed. The IPO market is booming, with DiDi being one of the larger debuts this year.

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