JD Technology’s Hong Kong initial public offering (IPO) plan has hit a roadblock due to the delay in approval from Chinese authorities, Reuters reported citing sources.
JD Technology, which is the fintech, AI and cloud arm of Chinese e-commerce firm JD.com, aims to raise up to $2bn from the offering.
In late January, the fintech had sought the approval of the China Securities Regulatory Commission (CSRC) for an offshore listing.
The firm had planned to file for listing with the Hong Kong Stock Exchange by the end of March, followed by the IPO later in 2022, the sources said.
JD Technology, which had also appointed investment banks for the IPO, is yet to receive CSRC’s approval, they added.
One of the sources told the news agency that the main hurdle in JD Technology’s IPO is related to its consumer finance business.
Off late, Chinese authorities have tightened their regulatory grip on fundraising by fintech firms, which usually deal with consumer finance business.
In November 2020, China stalled Jack Ma-backed Ant Group’s $37bn IPO.
Banks’ reliance on micro-lenders or fintech firms for offering consumer loans is a cause of concern for Chinese regulators as the economy faces risks of rising defaults and bad asset quality.
In a statement to Reuters, the CSRC said it will conduct a review of JD Technology’s Hong Kong IPO in line with laws and regulations.
In September 2020, JD Technology’s predecessor JD Digits filed for a $2.97bn IPO on Shanghai’s STAR Market but pulled it back in March 2021.