Investors Realize Partial Exits In JD.Com’s $1.78B IPO

Beijing-headquartered Chinese e-commerce operator JD.com, Inc. has completed raising a total of US$1.78 billion in an IPO on the NASDAQ, collecting more than its original target of US1.5 billion, according to the company’s latest securities filings.

The IPO provided partial exits to JD.com’s financial backers, including some of the world’s biggest names in the hedge fund and private equity world.

Tiger Global Management, which held 18.1% of JD.com’s total share base before the IPO, sold 13.358 million shares. DST Global, an investment firm founded by Russian businessman Yuri Milner with a pre-IPO stake of 9.2%, sold 6.772 million shares.

Asia-focused hedge fund Hillhouse Capital Management, with a 13% stake, sold 9.568 million shares. Hillhouse Capital is managed by Zhang Lei, a Yale graduate who worked with the Yale Endowment while as a student there.

An entity controlled by Capital Today China Growth Fund, L.P., a fund managed by Chinese private equity firm Capital Today founded by Kathy Xu, sold 5.756 million shares. The firm held a 4.8% stake of JD.com before the IPO.

Two small financial investors, including Sequoia Capital and Chinese private equity firm Bull Capital Partners Ltd., are not selling any shares in the IPO.

In March, Shenzhen-based Chinese internet services giant Tencent Holdings Ltd said it would acquire a 15% stake in JD.com for US$214.7 million. Tencent’s stake is subject to a three-year lock-up period.

Tencent’s investment diluted other investors’ stakes. For example, Tiger Global’s stake was diluted to 18.1% from 22.1%. Hillhouse Capital’s stake was diluted to 13% from 15.8%.

JD.com recorded US$8.04 billion in total revenue during the first nine months of 2013, compared with US$6.76 billion for the whole year of 2012. It had US$10 million of net profit during the first nine months of 2013, compared with a US$283 million loss for the whole year of 2012, according to its filing.

 
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