The size of the Yirendai IPO appears to be shrinking.
CreditEase's peer-to-peer lending offspring Yirendai announced terms for its NYSE listing yesterday. The Beijing-based lender plans to raise $75m by offering up 7.5m of American Depository Shares (ADSs) at a price range of $9 to $11. At the midpoint of the proposed price range, Yirendai would be valued at $575m.
This is the latest in a series of adjustments to the planned listing. In late November, we learnt that Yirendai would attempt to raise up to $100m through the IPO. The consumer lending platform filed confidentially on 27th February this year. In April, Bloomberg reported that Yirendai intended to raise around $300m through a listing, which would have valued the platform at roughly $2 billion. In short, the IPO seems to have been gradually losing steam ever since first landing in the press.
Why? Could the answer lie in this thoroughly researched piece by Spencer Li of Fincera (an alternative lending platform focused on China’s heavy trucking market)? In the article, Mr. Li raises questions about everything from the interest rates charged by Yirendai, to the platform’s origination activities, to its ties with the CreditEase mothership.
Morgan Stanley, Credit Suisse and China Renaissance are joint bookrunners on the Yirendai IPO – which is expected to launch next week. Fellow Chinese peer-to-peer lender China Rapid Finance plans to raise up to $200m in a US IPO at some point in the first half of 2016, according to the Wall Street Journal. The Yirendai listing may well become an important yardstick for future Chinese peer-to-peer lenders seeking to list in the US.