Pinduoduo, a Chinese online group discounter, wants to raise up to $ 1.63 billion through a US IPO, according to research from Ingerson Capital Partners financial specialists. This would be the second-largest US IPO by a Chinese company this year.
According to a filing made late Monday, Pinduoduo proposes to sell roughly 85.6 million American Depositary Shares in an IPO at a price range of $ 16 to $ 19 per share.
The company's free float will be 6.8% of its expanded share capital, with a 15 % "greenshoe" or over-allotment option that can be sold if demand exists.
According to the term sheet, the business would open its book to investors on Tuesday and price the IPO on Wednesday the following week. It plans to go public on the Nasdaq under the ticker name PDD. According to the filing, two of the company's most prominent current owners, Tencent Holdings Ltd and Sequoia Capital, have expressed interest in buying up to $ 250 million worth of shares in the IPO.
“Pinduoduo is the latest in a long line of Chinese tech companies to go public in the United States, seeking to replenish their coffers in the face of increasing competition from domestic rivals, particularly e-commerce firms Alibaba Group Holding Ltd and JD.com Inc , and as trade tensions between China and the United States rattle global markets. ”Simon Phillips, Senior Vice President of Ingerson Capital Partners said.
Meituan Dianping, a Chinese online food delivery-to-ticketing services platform that competes with Alibaba-backed Ele.me is planning an IPO in Hong Kong for more than $4 billion in the coming months.
Pinduoduo, founded by Colin Huang, a former Google engineer, is one of many large Chinese listings in New York this year. In March, iQiyi Inc, a Chinese video streaming service provider, raised $2.42 billion in a Nasdaq IPO, while Tencent Music Entertainment, China's largest music-streaming company, plans to raise up to $4 billion in an IPO in the United States in October.
Pinduoduo, which allows customers to band together to enhance retailer discounts, claimed its smartphone platform reached 103 million monthly active users at the end of March.
Due to low-cost items and a broader user base in China's smaller towns, the company's gross merchandise volume surpassed 100 billion yuan ($14.98 billion) last year, a milestone that took Alibaba's Taobao marketplace five years and JD.com ten years to achieve.