Chinese ridesharing app Didi plans $60bn float in Hong Kong in 2021

Chinese ridesharing business Didi Chuxing is reportedly planning to float in Hong Kong in 2021 with a valuation as high as $60bn (£46bn).

The multi-billion dollar listing follows reports of Didi abandoning an earlier plan to float in New York in part due to rising tensions between the US and China, Reuters reported.

Didi, backed by technology investment giants SoftBank , Alibaba and Tencent, has started initial talks with investment banks for the IPO, according to three people speaking to Reuters.

The company has grown substantially in recent years thanks to its 2015 merger with rival Kuaidi as well as its 2016 purchase of Uber’s ridesharing operations in China in exchange for a 17.5pc stake in Didi.

However, Didi reportedly walked away from merger talks with rival Meituan after disagreeing over the valuation of a combined business. The firm has previously denied entering into any merger talks with Meituan.

Didi reached profitability in the second quarter of 2020, according to executives. President Jean Liu told CNBC earlier this year that the company’s core ridesharing business is now making a “small profit.”

An eventual float could follow another investment round designed to extend the company’s runway and boost its valuation beyond $60bn.

The float, which could take place as soon as the first half of 2021, is likely to occur against a backdrop of a continuing trade war between the US and China which has already seen Chinese companies such as TikTok and Huawei make sweeping changes to their operations.

The political situation has led Didi to favour Hong Kong for its float, Reuters reported. The decision was also prompted by the relatively poor stock market performance of American rivals Uber and Lyft, both of which are trading below their IPO prices after floating in New York.

A Didi spokesman said the company "does not have any definite IPO plans."