Xiaomi has set initial tentative terms for the world’s biggest initial public offering with potential to raise up to $6.1 billion in Hong Kong. The Chinese smartphone maker plan to offer 2.18 billion shares at HK$17 to HK$22 each, with talks with firms China Mobile Ltd, China’s largest wireless carrier, and Qualcomm Inc., a US wireless-chip giant to become vital investors, according to people familiar with the matter.
Xiaomi aims to start taking orders from investors as soon as Thursday said the people. Xiaomi was the first to file for a Hong Kong IPO. 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 Hong Kong IPO according to Bloomberg.
China Mobile and Qualcomm have been discussing potential investments of around $100 million each in the Xiaomi IPO, as an affiliate of Chinese express delivery firm SF Holding Co. is in talks to buy $30 million of stock, the people said. CMB International has been discussing a potential HK$1.5 billion or $191 million investment while an investment fund run by China Development Bank is in talks to buy HK$518 million of shares in the offering. A fund backed by China Merchant Groups is negotiating the purchase of about HK$220 million in stock.
Xiaomi planned to seek about $10 billion combined from the HK IPO and an offering to Chinese investors earlier. It delayed its plan to float Chinese depositary receipts in Shanghai in accordance to the government’s goal to get its biggest tech firms to list locally. The company aims to finalize cornerstone investors by Wednesday and details of the offering could still change before the deal launches.
Representatives of the organizations involved declined to comment. CLSA Ltd., Goldman Sachs Group Inc. and Morgan Stanley are leading Xiaomi’s HK IPO as joint sponsors according to an exchange filing last month. Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co and six Chinese banks are helping arrange share sale, said the people.