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Chinese Ride Hailing Firm Didi’s US IPO Raises $4.4 Bln – Reports

Chinese Ride Hailing Firm Didi’s US IPO Raises $4.4 Bln – Reports
The initial public offering (IPO) issued in the United States by the Chinese ride hailing company Didi Global Inc helped it to raise $4.4 billion as the company’s shares were priced  at the top of its indicated range while also increasing the number of shares sold, said reports quoting sources familiar with the matter.
317 million American Depository Shares (ADS) were sold by Didi compared to its planned 288 million priced at $14 a share, noted the reports. This would give the Chinese firm a valuation of about $73 billion on a fully diluted basis and a valuation of $67.5 billion on a non-diluted basis.
The company went [public on the New York Stock Exchange on June 30.
The company sold more than the planned number of shares because of oversubscription by multiple times the company’s investor order book.
Reports also noted that the company asked its investors to expect their orders to be scaled back after the completion of the allocations.
So far this year, the number of Chinese companies listing in the US has touched a record with firms rush to capture the lucrative valuations being achieved in the US stock market. The Didi listing was also the largest share sale by a Chinese company in the US since the IPO launch of Alibaba which raised $25 billion in 2014.
Initially Didi had planned to obtain a valuation of up to $100 billion, according to previous reports. Didi decided to cut down the size of the deal after briefings with investors prior to the launch of its IPO.
Douglas Kim, a London-based independent analyst, who writes on Smartkarma said that this cut down also potentially reflects concerns among investors about the anti-trust crackdown ion China of its domestic tech companies and a more volatile IPO environment worldwide in the current year. 
"But it seems like many investors like this deal, the volatile IPO environment helped to lower IPO price and valuation looks attractive," Kim said.
Didi's IPO was covered early on the first day of the book-build last week and the investor books were closed on Monday, a day ahead of schedule.
Former Alibaba employee Will Wei Cheng co-founded Didi in 2012.Cheng is also currently the chief executive officer of the ride hailing firm. Jean Qing Liu, a former Goldman Sachs banker, was the other co-founder of Didi and he is currently the president of the ride-sharing firm.
The Chinese firm is backed by SoftBank, Uber Technologies Inc and Tencent.
Didi has been credited with forcing Uber out of the Chinese market after the US ride hailing company lost a price war and was forced to sell its China operations to Didi against a stake in the Chinese company. Liu Zhen, the head of Uber China at the time, is Didi's Liu's cousin.
Historically, Didi was unprofitable to start with just like most of the other ride-hailing companies around the world - that was until the first quarter of this year when it reported a profit of $30 million.

Christopher J. Mitchell

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