China's Didi plans to raise up to $4.3bn through US IPO

The ride-sharing company aims to grow its presence in some international markets and introduce new products

FILE PHOTO: Logo of Didi Chuxing is seen at its headquarters building in Beijing, China August 28, 2018. REUTERS/Jason Lee/File Photo

Didi Global, the Chinese ride-sharing company backed by SoftBank, is planning to raise as much as $4.3 billion from its IPO in the US as it looks to grow its presence in some international markets and introduce new products.

The company expects its listing shares to range between $13 and $14, which values the company as high as $67bn, according to a filing with the US Securities and Exchange Commission.

“The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, and obtain additional capital,” the company said.

It plans to list the equivalent of 72 million shares of Class A common stock on the New York Stock Exchange under the ticker symbol DIDI.

Thirty per cent of the net proceeds from the offering will be invested in boosting the company’s technological capabilities, while 20 per cent will be earmarked to introduce new products, according to the company. It will also invest 30 per cent of the total money raised through the IPO to expand globally.

Shared mobility is gaining traction across the globe due to technological advancements. A number of companies are active in the sector including Uber, Grab, Lyft and India’s Ola.

Didi is currently active in 4,000 cities across 16 countries.

“We expect the shift from traditional mobility such as private cars and public transportation to shared mobility to further accelerate,” Didi said.

“The global mobility market is expected to reach $16.4 trillion by 2040, by which time the penetration of shared mobility and electric vehicles is expected to have increased to 23.6 per cent and 29.3 per cent respectively.”

Didi accelerated its listing plans after its business rebounded as the coronavirus pandemic ebbed in China. In the first quarter, revenue more than doubled from the equivalent period a year earlier to reach $6.4bn. The company also turned a profit for the three months, reporting net income of $837 million.

SoftBank’s Vision Fund, Uber and Tencent Holdings are among Didi’s biggest shareholders with combined stakes of about 41 per cent, its filing shows. Didi co-founder Will Wei Cheng holds 7 per cent of the shares.

Goldman Sachs, Morgan Stanley and JP Morgan are the lead underwriters for Didi's NYSE float. It added more than a dozen new ones on Thursday, including BofA Securities, Barclays, China Renaissance, Citigroup, HSBC and UBS Investment Bank.