Amid strong political unrest, Alibaba has raised almost $13 billion in Hong Kong.
The e-commerce giant placed 500 million shares in the Hong Kong market at HK$176 per share. This is almost $180 per share in the U.S. market.
The shares were listed 3 percent lower to Tuesday’s closing price in New York. Alibaba captured investor interest by offering shares cheaper.
Shares of Alibaba have gone up 33 percent in the current year, with the consumer sector doing fine in China. The company has shown a good revenue growth of 40 percent when compared to last year. Earnings per share have risen 36 percent from last year.
Alibaba shares are expected to start trade in the Hong Kong market beginning next week. Alibaba has $30 billion in cash reserves already and will proceed with the extra cash raised from its listing.
In 2014, Alibaba went public on the New York Stock Exchange. It raised $25 billion through its listing on that year.
Alibaba states that with the proceeds raised now, it will help to expand its online service range. Fliggy is its online travel platform, while Ele.me is its local service platform.
Ele.me faces stiff competition from rival Meituan Dianping. They have been catering to consumers in the food delivery market. Competition is so stiff that they offer huge discounts to attract consumers to their meals. While Meituan occupies more than 53 percent of market share, Ele.me captures 43.9 percent of market share, says a Chinese consultancy.
Millennials who use these apps come under the age group 25 to 39. They work long hours and prefer to use their apps for their food, says Daxue Consulting reports.
In spite of the political chaos in Hong Kong, Alibaba went ahead with its listing on the Hong Kong Exchange and has raised $13 billion through its secondary listing, showing the confidence placed by investors in the company.