Alibaba to boost IPO size on 'overwhelming' demand

Alibaba Group Holdings Ltd. IPO
Carlos Barria | Reuters

Alibaba Group Holding plans to increase the size of its U.S. initial public offering because of "overwhelming" demand for the deal, people familiar with the deal said on Monday.

The Chinese e-commerce company launched the IPO last week and had enough investor demand to cover the entire deal within two days, people familiar with the process said last week.

Alibaba could set a new record for the world's biggest IPO if underwriters exercise an option to sell additional shares to meet demand, pushing it as high as $24.3 billion and overtaking Agricultural Bank of China Ltd's $22.1 billion listing in 2010.

The company and some shareholders offered 320.1 million American depositary shares at a $60-$66 per share indicative range. Alibaba will likely file an amendment to its IPO later on Monday with a higher price range after discussing the new price with large U.S. mutual funds and institutional investors, one of the people said.

"Demand has been overwhelming since the launch," said the person, who couldn't be named because details of the IPO aren't yet public. "Increasing the price range was already on the cards from the beginning."

Bloomberg earlier reported that Alibaba plans to increase the top end of the price range to above $70.

Read MoreAlibaba IPO demand heavily oversubscribed as investors jockey for shares

Reuters reported on Friday that Alibaba plans to close its IPO order book early after it received enough orders to sell all the shares in the record-breaking offering.

The company launched its IPO last week and is expected to price the deal on Sept. 18. It will start trading a day later.

Alibaba spokeswoman Florence Shih declined to comment.