Alibaba’s IPO Demand High; Roadshow Covers Entire Offering

Demand for the much-awaited Initial Public Offering (IPO) of Alibaba Group Holdings, the Chinese e-commerce and web giant, is already shooting through the roof and in just two days of investor meetings, the company has received enough orders to cover its entire IPO.

Alibaba's shares are expected to start trading on the New York Stock Exchange Sept. 19 in the price range of $60 to $66, sources told Reuters.

The company initially planned  raising $21.1 billion in its initial offering but according to several reports, its shares have been oversubscribed already.

Alibaba is currently on a roadshow  and has been meeting investors since Monday. Analysis shows that the company's shares would fall short on the demand it has been creating. If the number of shares fails to meet the demand, the company's underwriters would have to sell more units of the company.

If the underwriters do agree to sell more shares, Alibaba could end up raising $24.3 billion marking the world's largest amount ever raised in an IPO.

Alibaba had initially planned on launching the IPO in August but pushed the date back to September because some investors were on a vacation and the company also needed further regulatory approval from the U.S. But experts believe the extension was for the better.

"There shouldn't be any obstacles for proceeding with the IPO," Li Muzhi, a Hong Kong-based analyst at Arete Research Service LLP told Bloomberg.

 "This just gives them a bit more time."

Alibaba first filed for an IPO in May and announced that it expects to raise about $1 billion on its first trading day.

Investors are eagerly waiting for the IPO because Alibaba holds 80 percent of the e-commerce market share in China. By investing in the shares, businessmen hope to tap the large e-business sector of China. The high demand for its shares is also partly because investors think that the shares are being offered at a discount.

Alibaba is reportedly tapping all the Chinese outside the homeland to speed up its global expansion.

"If Alibaba's strategy is to follow the Chinese diaspora, it's a smart strategy because you don't have to build a brand from scratch," Niraj Dawar, a professor of marketing at the Ivey Business School in Canada told The Salt Lake Tribune.

"To be a global player they eventually have to serve markets that are non-Chinese," Dawar added.