China’s smartphone maker Xiaomi targets $6.1bn in Hong Kong IPO
Xiaomi Corp. is gearing up for one of the biggest global tech IPOs of recent years, aiming to raise as much as $6.1bn.
The Chinese smartphone maker and existing investors plan to offer 2.18bn shares – including about 65 per cent primary shares – at HK$17 to HK$22, Reuters reported having spoken people involved who asked not to be identified.
The Beijing-based, Cayman-domiciled, firm intends to start taking orders from institutional investors on Thursday. China Mobile Ltd., the nation’s biggest wireless carrier, and U.S. wireless-chip giant Qualcomm Inc. are reportedly among eight firms in talks to become cornerstone investors.
The cornerstone investors are expected to buy about 13 per cent to 15 per cent of the shares being offered in the IPO. The line-up of these investors could be changed before the company takes orders from retail investors on Monday, Reuters reported.
Xiaomi lowered its likely valuation to a range of $55 billion to $70 billion following its decision to delay its mainland share offering until after its Hong Kong IPO, Reuters reported on Tuesday.
Read more: Smartphone-maker Xiaomi to raise up to $3bn in mainland China
The delay was triggered by a dispute between the company and regulators over the valuation of its China depositary receipts (CDRs), sources said, casting doubt on Beijing’s efforts to lure foreign-listed Chinese tech giants back home.
Xiaomi had been expected to raise up to $10 billion, split between its Hong Kong and mainland offerings. The delay to the CDRs was a blow for Chinese officials, who designed them as a means for China to compete globally for major tech listings and give mainland investors access to the country’s tech champions.
Xiaomi’s blockbuster Hong Kong offering, however, is set to be the first listing under new exchange rules designed to attract tech floats with a weighted-voting rights structure after the city’s exchange changed its rules in April. The deal could become the world’s biggest first-time share sale since September 2016, when Postal Savings Bank of China Co. raised $7.6 billion in a Hong Kong IPO, data compiled by Bloomberg show.
Read more: Xiaomi looks to raise $10bn for Hong Kong float