Shein’s Bold London IPO Move: Less Than 10% Float Sought Amid Regulatory Hurdles

Shein is challenging UK financial norms with its planned London IPO, seeking approval to float less than 10% of its shares. Valued at $66 billion, the company faces regulatory delays that could redefine how global markets approach major listings.

Shein Considers Waiver for London IPO Listing Rules

According to two sources familiar with the subject, fast fashion retailer Shein is contemplating requesting that UK regulators let it float its shares in London without selling 10% to the public, as per listing guidelines.

One of the sources indicated that the firm is looking into this as a way to ease its initial public offering.

If approved, it would be unprecedented for a London-based company to be able to list below the 10% threshold that was recently put in place.

Shein, a Singaporean e-commerce platform selling largely Chinese-made $5 tops and $10 gowns, secretly applied for a London listing with the Financial Conduct Authority (FCA) in June.

Regulatory Delays for Shein’s $66 Billion Valuation

According to Reuters last week, the application is being approved by Britain's banking regulator, although at a slower rate than typical.

They weren't permitted to speak to the media, so they declined to be identified.

Over the past year, Shein has raised $66 billion in a funding round. At that price, an initial public offering (IPO) valued at 10% would be $6.6 billion. According to Dealogic, the largest initial public offering (IPO) in Europe this year was the $2.9 billion offering by Puig, a perfume and fashion company.

At this time, it is unknown what Shein is aiming to raise through its London offering or what its current valuation is.

London’s Revised Listing Rules Draw Attention

In an effort to make the city a more appealing location for businesses, London revised its listing regulations in 2021. The FCA stated at the time that it reduced possible hurdles for large IPOs by lowering the proportion of shares an issuer is required to float from 25% to 10%.

In July, Britain made history by implementing the most significant change to its company listing standards in over 30 years. This move was made to better compete with New York and the EU for new issuers, Investing.com explains.

Reuters stated in May that Shein started looking about listing on the London Stock Exchange earlier this year, citing sources. Legislators in the United States blocked the China-founded company's initial bid to list on the New York Stock Exchange.

Chinese and UK Regulators Add Further Challenges

Reuters has previously stated that Shein is also awaiting approval from China's securities regulator on its plans for an initial public offering (IPO) in London.

Coresight Research predicts that its revenues would reach $50 billion this year, representing a 55% increase from 2023.