Chinese smartphone maker Xiaomi Corp is planning to raise up to $6.1 billion (roughly Rs. 41,500 crores) from a Hong Kong IPO launching this week, people with knowledge of the matter said, in what will be one of the biggest tech floats globally of recent years.
Xiaomi, which also makes Internet-connected devices, plans to sell about 2.18 billion shares including about 65 percent primary shares in its initial public offering (IPO) at a price range of HKD 17 to HKD 22 ($2.17 to $2.80) each, said two of the people.
The Beijing-based, Cayman-domiciled company plans to bring in eight cornerstone investors including US chipmaker Qualcomm, Chinese express delivery company S.F. Holding Co, domestic telecom service provider China Mobile and state-run conglomerate China Merchants Group, according to the people.
The cornerstone investors are expected to buy about 13 percent to 15 percent of the shares being offered in the IPO, the people said. The line-up of cornerstone investors could be changed before the company takes orders from retail investors on Monday, they said.
The company will open the book to intuitional investors on Thursday, they added.
Xiaomi, China Mobile and China Merchants Group declined to comment. Qualcomm and S.F. Holding did not immediately respond to requests for comment. All the people declined to be identified as the information was not public.
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.
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 its CDRs is 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, on the other hand, is set to be the first listing under new exchange rules designed to attract tech floats, as competition heats up between Hong Kong, New York and the Chinese mainland.
China’s largest provider of on-demand online services, Meituan-Dianping, also plans to file for a Hong Kong IPO later this week, which would be the city’s second multibillion-dollar tech float this year, the people said.
Meituan-Dianping declined to comment.
Xiaomi was set up in 2010 and doubled its smartphone shipments in 2017 to become the world’s fourth-largest maker, showed data from Counterpoint Research, defying a global slowdown in smartphone sales.
CLSA, Goldman Sachs and Morgan Stanley are joint sponsors for Xiaomi’s Hong Kong IPO.
Xiaomi Said to Target as Much as $6.1 Billion in Honk Kong IPO