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(Bloomberg) -- Chinese ride-hailing giant Didi Chuxing Inc. is looking to raise as much as $4 billion in one of the biggest U.S. initial public offerings of the past decade.
Didi, which is one of the largest investments in SoftBank Group Corp.’s portfolio, is marketing 288 million American depositary shares for $13 to $14 apiece, according to a filing Thursday with the U.S. Securities and Exchange Commission.
At the high end, the company would have a market value of about $67 billion based on the outstanding shares listed in the filing. Accounting for restricted stock units, its diluted value would reach about $73 billion.
Affiliates of Morgan Stanley as well as Singapore’s Temasek Holdings Pte have agreed to purchase $1.25 billion of the shares in the offering, according to Thursday’s filing.
The company’s valuation is at the lower end of a range that had stretched up to $100 billion, Bloomberg News reported in April, suggesting investors balked at the price tag. The same happened with U.S. ride-hailing giant Uber Technologies Inc., which was valued at $75.5 billion in its 2019 IPO, well below the $120 billion that had been touted a year earlier. Uber now has a market value of $95 billion.
Didi, whose shares had reportedly been trading at a valuation of about $95 billion on the secondary market this year, is going public in what is shaping up to be a record year globally for IPOs. A blank-check company listing boom in the U.S. in the first couple months of 2021, as well historically low interest rates and monetary stimulus, has led to a flurry of share sales, including by some of the world’s hottest tech companies.
The IPO would be sixth-largest in the U.S. during the past decade, topped only by, in addition to Uber, the likes of Alibaba Group Holding Ltd., Facebook Inc. and, most recently, Coupang Inc., according to data compiled by Bloomberg.
Still, creeping inflationary pressures have injected volatility into markets, causing investors to pivot away from the high-growth stocks that saw phenomenal share price rallies last year. That has rippled through the IPO market, with investors becoming more selective about which companies they back.
Regulatory Scrutiny
Didi’s offering has also been clouded by speculation over increased regulatory scrutiny. Reuters reported last week that China’s antitrust watchdog has commenced a probe of the ride-hailing firm’s business practices and pricing mechanisms. The company, which was among 34 internet giants that had been ordered by regulators in April to correct any excesses, had said in an earlier filing that, while it had completed the process, it couldn’t assure investors that regulators would be satisfied with its efforts or that it would escape any penalties.