This undated photo shows a mascot of Ant Group at the company's headquarters in Hangzhou, Zhejiang province. (LONG WEI / FOR CHINA DAILY)

Institutional investors are buying Ant Group Co’s shares at a 50 percent premium, signaling the Chinese mainland fintech giant is poised to soar in its debut this week following the world’s largest initial public offering.

Some trades were executed at HK$120 (US$15.50) apiece in gray-market trading Monday, compared with the listing price of HK$80, according to people familiar with the matter who declined to be identified as they aren’t authorized to speak to the media.

Billionaire Jack Ma’s Ant IPO has become the most anticipated in years, attracting at least US$3 trillion in orders for its dual listing in the Hong Kong Special Administrative Region (HKSAR) and Shanghai ahead of its trading debut on Nov 5

Billionaire Jack Ma’s Ant IPO has become the most anticipated in years, attracting at least US$3 trillion in orders for its dual listing in the Hong Kong Special Administrative Region (HKSAR) and Shanghai ahead of its trading debut on Nov 5. The stampede for shares is fueling predictions of a first-day pop, even as skeptics warn of risks including the US election, tightening regulations in the mainland and rising COVID-19 infections worldwide.

“This is huge: the largest IPO ever, priced at the top end and now this huge premium in the gray market,” said Gary Dugan, chief executive officer of the Global CIO Office in Singapore, which didn’t take part in the IPO. “It’s pretty extraordinary given the backdrop and it shows you how much Asia is decoupling from the United States.”

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In a so-called gray market, investors can bid for new shares before they officially start trading on a stock exchange. The over-the-counter mechanism is often seen as an early indicator of investor demand for an IPO. Retail buyers will be able to trade through a similar channel a day before Ant’s Thursday debut.

Demand for HKSAR shares was so strong that the firm stopped taking orders from professional investors a day earlier than scheduled. Institutions and strategic investors may take up about 97.5 percent of the offering in the HKSAR, according to Ant’s prospectus, though the figures may change due to clawback and greenshoe provisions.

The fintech company’s US$34.5 billion IPO gives it a market value of about US$315 billion based on filings, bigger than JPMorgan Chase & Co and four times larger than Goldman Sachs Group Inc. The sale vaults Ma’s fortune to US$71.6 billion, topping the Walmart Inc heirs.

The IPO surpasses Saudi Aramco’s record US$29 billion sale last year, and the US$25 billion raised by Ma’s Alibaba Group Holding Ltd in 2014. Ant priced its Shanghai stock at 68.8 yuan (US$10.27) apiece. The company may raise another US$5.17 billion if it exercises the option to sell additional shares to meet demand, known as the greenshoe.

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The IPO is attracting interest from some of the world’s biggest money managers, and sparking a frenzy among individual investors in the mainland clamoring for a piece of the sale. In the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for over 76 billion shares, more than 284 times the initial offering tranche, according to Ant’s Shanghai offering.

“The market’s infatuation with growth stocks is very strong at the moment,” said Arnout van Rijn, chief investment officer for Asia-Pacific at Robeco.

Bidding was so intense in the HKSAR that one brokerage’s platform briefly shut down after becoming overwhelmed by orders. Demand for the retail portion in Shanghai exceeded initial supply by more than 870 times.

T. Rowe Price Group Inc, UBS Asset Management and FMR LLC, the parent of Fidelity Investments, are among the money managers angling for a piece of the deal, a person familiar with the matter has said. HKSAR stockbrokers are so confident Ant IPO will go smoothly that they’re offering to let mom-and-pop investors buy the stock with as much as 20 times leverage.

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Ant was formed when Alibaba launched the Alipay payments app in 2004 as an escrow service for buyers and sellers on Ma’s e-commerce website. In 2013, they were given the ability to save money and earn interest on the balances stored on their accounts. The firm then started offering credit to small businesses, branching out from its consumer-finance focus.