Alibaba's Freshippo IPO Plans Take a Backseat as Valuation Expectations Adjust

Alibaba Group Holding Ltd (NYSE:BABA) has decided to delay the potential Hong Kong initial public offering (IPO) of its Freshippo grocery chain due to subdued investor sentiment in the consumer stocks sector. The Chinese tech giant has revised its valuation expectations for Freshippo, aiming for approximately $4 billion in the listing, down from its earlier estimates of $6 billion - $10 billion when the company contemplated a private funding round in the previous year, Bloomberg reports.

The capital management committee at Alibaba, responsible for the conglomerate's restructuring, has now opted to hold off on the Freshippo IPO. Instead, they will prioritize listing other business units.

If these delays persist, Alibaba might miss its target of launching Freshippo's IPO by May 2024. 

Nevertheless, there is potential for Freshippo to proceed with its listing once China's retail market and overall economy show signs of improvement, boosting investor confidence in the sector. 

Freshippo, often likened to Sam's Club, offers a unique supermarket experience with features like an in-store dining option and 30-minute home delivery. 

Freshippo was initially likely to be one of the first Alibaba units to go public following the company's surprise announcement in March about splitting its business into multiple entities. 

Founded in 2016 and headquartered in Shanghai, Freshippo operated over 270 self-operated stores across China by the end of March 2022. 

Price Action: BABA shares traded higher by 0.06% at $90.03 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.