China's Didi raises US$4 billion in US IPO

Didi will sell 288 million American Depository Shares (ADS) at US$14 apiece, the source said. This gives Didi a valuation of about $73 billion on a fully diluted basis.

NEW YORK: Chinese ride hailing company Didi Global Inc raised US$4 billion in its U.S initial public offering (IPO) on Tuesday, pricing it at the top of its indicated range, according to people familiar with the matter.

Didi will sell 288 million American Depository Shares (ADS) at $14 apiece, the source said. This gives Didi a valuation of about $73 billion on a fully diluted basis.

The sources asked not to be identified ahead of an official announcement. Didi did not immediately respond to a request for comment.

The listing in New York, which will be the biggest U.S. share sale by a Chinese company since Alibaba raised $25 billion in 2014, comes on the heels of record IPO activity this year, as companies rush to capture the lucrative valuations seen in the U.S. stock market.

A total of 29 IPOs by Chinese companies in the United States in the first six months of the year raised $7.6 billion, the highest amount ever for that time period, according to Refinitiv data.

Didi's IPO was covered early on the first day of the book-build last week and the investor books were closed on Monday, one day ahead of schedule..

The book is covered multiple times by investors, two sources told Reuters on Tuesday.

An over-allotment option, or greenshoe, exists where a further 43.2 million shares can be sold to increase the size of the deal.

Didi was co-founded in 2012 by former Alibaba employee Will Wei Cheng, who currently serves as the chief executive officer. Cheng was joined by Jean Qing Liu, a former Goldman banker and the current president of the ride-sharing company.

The company counts SoftBank, Uber Technologies Inc and Tencent as its main backers.

Didi is also known for successfully pushing Uber out of the Chinese market after the U.S. company lost a price war and ended up selling its China operations to Didi for a stake. Liu Zhen, the head of Uber China at the time, is Didi's Liu's cousin.

Like most ride-hailing companies, Didi had historically been unprofitable, until it reported a profit of $30 million in the first quarter of this year. The company reported a loss of $1.6 billion last year, and its revenue declined 8% to $21.63 billion in the same period, according to a regulatory filing, as business slid during the pandemic.

Didi shares are due to start trading on Wednesday on the New York Stock Exchange under the symbol "DIDI." Goldman Sachs, Morgan Stanley, and J.P. Morgan are the lead underwriters for the IPO.

- Reuters
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