Hong Kong: Alibaba has secured its place as the world’s largest-ever stock market flotation, after the Chinese e-commerce company exercised an option to sell extra shares.

The company has chosen to sell more shares, according to three people familiar with the matter, after receiving overwhelming interest in its initial public offering from global investors. Alibaba’s shares debuted on the NYSE on Friday, soaring by more than a third.

Investor demand was so hot that shares failed to begin trading for more than two hours as the company’s banks struggled to sniff out a seller — the longest such delay in NYSE history. Shares were sold to investors during the IPO process at $68 each, but briefly reached $99 during the opening minutes of trading. Alibaba’s shares, trading under the ticker BABA, finished the day at $93.89, up 38 per cent.

Based on Friday’s closing share price, the company now has a market capitalisation of more than $230 billion (Dh844.56 billion) — larger than fellow tech giants Facebook and Amazon, and US household names such as JPMorgan and Procter & Gamble. Were it listed on the Hong Kong exchange, as once planned, 15-year-old Alibaba would have become the city’s third-largest company by market cap, behind only China Mobile and PetroChina.

The so-called “greenshoe”, or overallotment, will be exercised in full, according to the three people, and increases the deal size of China’s dominant ecommerce platform by 15 per cent, taking the total to $25 billion. The decision to exercise was first reported in the Wall Street Journal. A spokesperson for Alibaba declined to comment.

A greenshoe option allows companies going public to increase the flotation size once trading is under way, typically done in response to strong investor demand.

With the additional share sale, Alibaba’s deal leapfrogs above previous record holder Agricultural Bank of China, which raised $22 billion in its 2010 listing in Hong Kong. Of the biggest IPOs in history by cash raised, the top three are now all from mainland Chinese companies, with Chinese lender ICBC in third place, while AIA - the Hong Kong-listed insurer - is in fourth, according to data from Thomson Reuters.

When originally planning its listing, Alibaba had set out with the target of $25 billion in mind, according to one person with knowledge of the matter at the time. In the lead-up to its debut, the company met with hundreds of investors around the world during a two-week roadshow, where executives - including founder Jack Ma - sought to assuage fears about corporate governance and ownership structure.

With shares now finally available to trade publicly, stock prices of listed companies previously seen as good proxies for Alibaba have been suffering.

On Monday, rival Chinese internet company Tencent saw its shares fall 3.3 per cent, while Alibaba shareholder Softbank dropped 6.1 per cent. In US trading on Friday, Yahoo, another shareholder, dropped 2.7 per cent while JD.com - a fellow Chinese ecommerce site - sank 4 per cent.

— Financial Times