Regulatory turf today prevents an Ant-like IPO. But things are changing4 min read 04 Nov 2020, 08:17 AM IST
The success of Ant in serving more than a billion Chinese people and then harvesting that value on the stock market raises the question—but what about India?
As much as $2.8 trillion, or money almost equal to the GDP of India, was available to buy shares of Alibaba Jack Ma’s Ant Group last week, making the $34.4 billion IPO, which has now run into trouble with the Chinese regulators, hugely oversubscribed. Ant is a Chinese company that began life as an escrow account to facilitate transactions on Alipay in 2004. Sixteen years later it has morphed into a gigantic multi-tentacled entity that leverages its wallet information to make loans, sell mutual funds, insurance and wealth management products, serving over a billion people. It partners with over 100 banks and over 170 asset managers, and reported an operating margin of 34% in the first half of 2020. It is mostly as much a platform as Uber or AirBnB are, but it does have proprietary offerings across credit and insurance. As the name suggests, Ant’s business philosophy rests on no client or need being small enough to be ignored. This is as bottom of the pyramid as it gets. And the treasure is equal to the GDP of the fifth-largest country in the world.