The Shein share offering would be a boost to London’s moribund IPO market.
Shein will hold informal investor meetings in the coming weeks for its planned IPO in London, three sources with knowledge of the matter said, and will continue preparations pending UK regulatory approval.
The China-founded online retailer plans to hold informal roadshows, mainly across Europe, one of the sources said, with a listed company answering questions from major investors and testing their appetite for investment.
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The sources declined to be identified because they were not authorized to speak to the media.
A spokesperson for Singapore-based Shein declined to comment.
Shein confidentially filed paperwork with Britain’s market regulator in early June, starting the process for a possible London stock exchange listing by the company later that year, Reuters reported in June, citing sources.
The company, which was valued at $66 billion in a fundraising round last year, began considering an initial public offering in London earlier this year after its original plan fell through in New York following opposition from U.S. lawmakers.
Shein is working to launch the float in the current quarter, provided it receives approval from Britain’s market watchdog, the Financial Conduct Authority (FCA), a separate source familiar with the matter said.
As Shein, known for its $10 tops and dresses, approaches its market debut, its treatment of employees and the environment has come under increasing scrutiny.
The fast-growing company’s ability to convince major global institutional investors of the soundness of its business case and financial health will determine whether it is able to match the $66 billion valuation it achieved last year.
Shein’s preparations for a possible listing in London mark a shift from its long-running U.S. IPO plan, which has encountered obstacles at home and abroad, Reuters reports.
The group confidentially filed for an initial public offering with the U.S. Securities and Exchange Commission in November and simultaneously sought approval from China’s securities regulator, sources said.
However, the China Securities Regulatory Commission (CSRC) told Shein earlier this year that it would not recommend a US IPO due to issues with the company’s supply chain, Reuters reports.
Shein’s London listing plan still requires CSRC approval, and it remains unclear whether the company has received any guidance from China’s regulator.
As of Thursday, Shein was not mentioned in a review of the CSRC website, which publishes approved offshore IPO candidates.
Shein’s financials are not publicly available, but Bernstein analysts estimated in April that net profit more than doubled last year from $700 million to $2 billion, giving the company a profit margin of 4.4 percent of sales.
The Shein share offering would be a boost to London’s moribund IPO market.
According to data from Dealogic, Britain has had just nine new listings this year, down from 18 in 2023. It lags behind other European countries and ranks 10th among listing locations in Europe, the Middle East and Africa in terms of IPO value.
Britain’s markets watchdog accelerated a series of new rules this summer to facilitate and encourage companies listed on the London Stock Exchange in their bid to catch up with New York and the European Union after Brexit.
Shein is facing opposition from several governments in Europe, with Germany, Austria, Denmark, France and the Netherlands writing a joint letter last week calling on European Union authorities to enforce the bloc’s standards on online platforms and express their support for removing the internet tax exemption. packages worth less than 150 euros.
Eliminating such “de minimis” tax breaks could hurt Shein’s profitability, investors say.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
First publication: Oct 3, 2024 | 10:21 PM IST