Ant Group IPO shelved - China IPO issuer on what it means for investors

Brendan Ahern, chief investment officer at KraneShares, Nick Colas, the co-founder of DataTrek Research, and Matthew Bartolini, head of SPDR Americas Research at State Street Global Advisors, discuss Ant Group's now-shelved IPO plans with CNBC's Bob Pisani. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Chinese financial technology giant Ant Group, which was gearing up for the world’s biggest IPO, could see its valuation come crashing down after its public listing was suspended, experts said.

It comes as Beijing announced there will be proposed regulations on micro-lending — a move that could force Ant Group to hold more capital, and make the company look a bit more like a bank rather than a technology company, the experts told CNBC.

“The biggest risk for Ant will be shifting from a fintech to a capital intensive regulated bank and not losing its competitive connection with consumers,” Eric Schiffer, CEO of private equity firm The Patriarch Organization, told CNBC by email.

“The proposed regulation decimates Ant’s valuation to more than 1/2 taking it under $150 billion.”

Ant Group, which is a third owned by e-commerce giant Alibaba and controlled by founder Jack Ma, was set to start trading on Nov. 5 in Shanghai and Hong Kong. The initial public listing would have raised just under $34.5 billion — setting a new world record, and valued it at $313 billion.

But two days before that listing, the Shanghai Stock Exchange said it was suspending the IPO and that Ant Group reported “significant issues such as the changes in financial technology regulatory environment.”

The shock move came after Ma appeared to criticize Chinese regulators and after he and two other other top Ant Group executives were called into a meeting with regulators three days before the listing.

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