Xiaomi IPO draws bids at 11pc discount
HONG KONG: Xiaomi Corp’s debut is off to a bad start even before its shares officially begin trading in Hong Kong on Monday.
Some institutional investors saw bids for the Chinese smartphone maker’s shares as low as HK$15.20 (RM7.92) on Thursday with no offers in grey-market trading, according to two people familiar with the matter. That’s 11 per cent below the issue price.
There was some selling interest at a five per cent discount though no firm offers, according to Andrew Jackson, head of Japanese equities at Soochow CSSD Capital Markets in Singapore.
The tussle over Xiaomi’s high valuation and concern over a United States-China trade war have overshadowed what had been one of the world’s most highly-anticipated initial public offerings (IPOs) of the year.
The smartphone maker said yesterday it raised just US$3.1 billion (RM12.5 billion) after pricing the IPO at the bottom end of a range, cutting its valuation to about US$54 billion — roughly half of the initial goal.
The company also scrapped a plan to sell shares on the mainland after failing to satisfy regulators.
Xiaomi is the first to sell shares with a dual-class structure, here, since the city changed its rules to allow founders to keep outsized voting rights, although that means the stock won’t be included in MSCI Inc’s global benchmarks.