Chinese ride hailing giant Didi Global said Friday it will delist from the New York Stock Exchange and pursue a listing in Hong Kong, ending its five-month presence in the US market.
Chinese regulators had reportedly pressed the company to delist from the US over concerns about data security.
Its shares started trading in New York on June 30 after the SoftBank and Tencent-backed company raised US$4.4bn from its IPO at US$14 per share.
Just two days after the listing, China's cyberspace regulator launched a data security probe into Didi and removed its app from smartphone app stores in China.
Didi’s top management had decided to push ahead with the IPO despite being asked by the regulator to put the deal on hold before a cybersecurity review of its data practices was completed, according to people familiar with the situation.
Didi shares closed at US$7.80 on Thursday, down 44.3% from the IPO price.
The company said its board had approved the plan to delist from the US and list in Hong Kong and that it would organise a shareholder meeting to vote on the matter.
IFR reported in March that Didi had considered both the US and Hong Kong as listing venues but preferred the US as it offered more flexibility on the timing and size of the offering. The potential regulatory scrutiny Didi might have faced in Hong Kong was also a major concern for the company back then.
Dida, a smaller rival of Didi, filed twice for a Hong Kong listing in October 2020 and April 2021 for a US$500m float, with the April application lapsing in October. IFR has reported the Stock Exchange of Hong Kong was not comfortable with Dida’s business model and had required the company to make additional disclosures such as the details of its operating licences in each city.
It is unclear how Didi can overcome the potential scrutiny from the stock exchange, but for now it will need to undergo cybersecurity inspections before the Hong Kong IPO, as recently proposed by the Chinese regulator, as it handles sensitive data that concerns national security.
Goldman Sachs, Morgan Stanley and JP Morgan led Didi's US IPO with Bank of America, Barclays, China Renaissance, Citigroup, HSBC and UBS.
SoftBank Vision Fund owns 21.5% of Didi, Uber Technologies 12.8% and Tencent 6.8%.