The IPO market is one that hubs such as Hong Kong, New York and London compete over for pre-eminence. The drama around the ride-hailing group – which provides delivery and financial services among its offerings – shows how turbulent the sector for new offerings can be.

The world of initial public offerings – important liquidity events that wealth managers track – has taken a further twist around the drama of Chinese ride-hailing group Didi Global, which is seeking to delist from New York.

A report by Reuters on 29 December 2021, quoting unnamed sources, said that Didi plans to use a mechanism which will allow it to list shares in Hong Kong without raising capital or issuing new stock.

Unlike typical IPOs, companies listing stock by introduction in Hong Kong do not raise capital or issue new shares. The mechanism was popular in the past among companies that wanted to build a brand in Hong Kong and the rest of Greater China, the report said.

Beijing is leaning on Didi after the firm defied Chinese authorities by going ahead with an IPO in the US earlier in 2021 despite being asked to put it on hold while a review of its data practices was conducted. 

The report said that the Hong Kong mechanism, known as 'listing by introduction', would allow owners of Didi US shares to transfer them to the city's bourse gradually. The report said that Didi aims to file for the Hong Kong listing by the end of April this year and list by June. It added that a spokersperson for Didi did not immediately respond to Reuters request for comment.

Didi provides a range of offerings, including financial services.

Chinese policymakers rattled investors last year with a number of abrupt moves to tighten regulations on certain sectors, such as financial services and tech. And it has been unafraid to stall IPO plans in certain conditions. For example, Ant Group, an affiliate of Chinese e-commerce giant Alibaba, had been slated to have its $34 billion IPO in early November 2020 in what would have been the world’s largest share float ever. However, investors were stunned when the IPO was pulled only a few days prior to the event. (Reports said that Ant Group’s rapid lending growth worried regulators. In just one year, Ant Group had written loans to half a billion people in China which accounted for nearly a fifth of the country’s outstanding short-term consumer debt as of June 2020.)