Didi Global, the China-headquartered ride hailing service backed by corporates SoftBank, Alibaba, China Life, Tencent, Apple, Booking Holdings, Ping An, eHi and Sina Weibo, went public today in a $4.44bn initial public offering.
The company increased the amount of shares in the offering from 288 million American Depositary Shares (ADSs), with four ADSs equalling one class A share, to approximately 317 million. They were priced at the top of the IPO’s $13 to $14 range and it floated on the New York Stock Exchange.
Investment bank Morgan Stanley’s Investment Management, Morgan Stanley Asia and Morgan Stanley Investment Management Company have expressed interest in acquiring $750m of shares in the offering and Temsaek $500m.
Formed through the 2015 merger of peers Didi Dache and Kuaidi Dache and formerly known as Didi Chuxing, Didi runs an on-demand ride service spanning its home country as well as Russia, Africa, Latin America and the Central Asia and Asia Pacific regions.
The company’s offering also includes food and package delivery, automotive and financial services. Its revenue decreased slightly to $21.6bn in 2020 while its net loss rose 9% to $1.62bn, though those figures were significantly affected by the covid-19 pandemic.
Didi has reserved 30% of the IPO proceeds for investment in its technology while a further 30% will go to international expansion activities. The company is putting 20% into adding new features to its offering and growing its existing services.
Kuaidi Dache and Didi Dache had secured $1.55bn from from SoftBank, e-commerce conglomerate Alibaba, internet group Tencent, car rental service eHi, DST Global, Matrix Partners, Tiger Global Management, New Horizon Fund, GSR Ventures and Citic PE between them prior to the merger.
Social media company Sina Weibo invested $142m in the company in 2015 before Ping An Ventures, a subsidiary of insurance group Ping An, co-led a $3bn round with China Investment Corp (CIC) and Capital International Private Equity Fund later that year, investing with Alibaba, Tencent, Temasek and Coatue Management.
SoftBank, Tencent, Alibaba and its Ant Financial affiliate joined insurance firm Chia Life, consumer electronics manufacturer Apple and Blackrock in the $4.5bn equity portion of a $7.3bn round for Didi the following year at a $28bn valuation.
The company added $5.5bn from SoftBank, financial services firms China Merchants Bank and Bank of Communications and Silver Lake Kraftwerk in 2017 at a valuation above $50bn, and $4bn from SoftBank and Mubadala Investment in a round later that year valuing it at $56bn.
Online travel agency Booking Holdings provided a further $500m for Didi in 2018 before automotive manufacturer Toyota invested $600m in mid-2019 to take its total debt and equity financing to $18.3bn. US-based ride hailing service Uber acquired a 20% stake in 2016 through the divestment of its Uber China subsidiary to the company.
SoftBank’s Vision Fund remains Didi’s largest shareholder post-IPO, with a stake decreased from 21.5% to 20.1%. Uber’s stake was diluted from 12.8% to 11.9% and Tencent’s from 6.8% to 6.4%.
Goldman Sachs (Asia), Morgan Stanley and JP Morgan Securities are active joint bookrunners for the IPO. BofA Securities, Barclays Capital, China Renaissance Securities (Hong Kong), China International Capital Corporation Hong Kong Securities, Citigroup Global Markets, Guotai Junan Securities (Hong Kong), HSBC Securities (USA) and UBS Securities are joint bookrunners.
Boci Asia, Bocom International Securities Limited, CCB International Capital, CLSA, CMB International Capital, Futu, ICBC International Securities, Mizuho Securities USA and Tiger Brokers (NZ) are co-managers for the offering.
The underwriters have 30 days to take up an option of buying almost 47.3 million additional ADSs, which would boost the size of the offering to $5.1bn. It is already the largest IPO of 2021 so far.
