Chinese smartphone maker Xiaomi has slashed up $548 million from seven cornerstone investors including U.S. chipmaker Qualcomm for its Hong Kong IPO of up to $6.1 billion, go together to a term sheet seen by Reuters.
Xiaomi, which also manages internet-connected devices, has set a price range of HK$17 to HK$22 ($2.17 to $2.80) each for its index in the Asian financial hub, one of the biggest tech floats globally in recent years, eclipsed the term sheet.
Other cornerstone investors include Chinese evidence delivery company SF Express, domestic telecom service provider China Non-stationary, state-backed investment firm CICFH Entertainment and state-run conglomerate China Dealers Group.
The seven will take up a combined 10 percent of the pieces being offered in the IPO, and the company will open the book to institutional investors on Thursday, according to the word sheet.
Xiaomi and China Mobile declined to comment. China Agents Group, CICFH Entertainment, Qualcomm and SF Express did not immediately respond to solicitations for comment.
The IPO values the Beijing-based, Cayman-domiciled company at $54.3 billion – or $70.3 billion after a 15 percent “greenshoe” or over-allotment alternative which can be sold if there is demand. If the greenshoe is exercised, Xiaomi’s extra float will be 9.99 percent of its enlarged share capital.
Xiaomi is exchange about 2.18 billion shares in the IPO, 65 percent of which are fundamental, according to the term sheet. The selling shareholders are early investor Morningside, a Chinese venture major firm, and Xiaomi managers Wong Kong Kat, Liu De, Heng Feng and Li Wanqiang.
Reuters arrived on Tuesday that Xiaomi lowered its likely valuation to a range of $55 billion to $70 billion make inquiry its decision to delay its mainland share offering until after its Hong Kong IPO.
The put in was triggered by a dispute between the company and regulators over the valuation of its China depositary proceeds (CDRs), sources said, casting doubt on Beijing’s efforts to attract foreign-listed Chinese tech giants back home.
Xiaomi had been watched to raise up to $10 billion, split between its Hong Kong and mainland sacrifices. The delay to its CDRs is a blow for Chinese officials, who designed them as a hopes for China to compete globally for major tech listings and give mainland investors access to the territory’s tech champions.
Xiaomi’s blockbuster Hong Kong offering on the other round is set to be the first listing under new exchange rules designed to attract tech wafts, as competition heats up between Hong Kong, New York and the Chinese mainland.
China’s largest provider of on-demand online rites, Meituan-Dianping, also plans to file for a Hong Kong IPO later this week, which last will and testament be the city’s second multibillion-dollar tech float this year, said child familiar with the matter.
Meituan-Dianping declined to comment. The people declined to be categorized as the information was not yet public.
Xiaomi was set up in 2010 and doubled its smartphone shipments in 2017 to develop the world’s fourth-largest maker, showed data from Counterpoint Investigation, defying a global
slowdown in smartphone sales.
CLSA, Goldman Sachs and Morgan Stanley are common sponsors for Xiaomi’s Hong Kong IPO.