Xiaomi finalises $4.7bn IPO

The GIC-backed electronics maker will float the bottom of its range, in an offering that is still the largest for a tech company since 2014.

China-based consumer electronics producer Xiaomi, which counts Singapore’s GIC as an investor, is set to raise $4.72bn in its initial public offering, sources told Bloomberg and Reuters today.

The company priced roughly 2.18 billion shares at the low end of the HK$17 to HK$22 ($2.17 to $2.80) range it had previously set. The price values Xiaomi at about $54bn, and it will float on the Hong Kong Stock Exchange.

Founded in 2010, Xiaomi designs and manufactures smartphones as well as other electronic devices such as smart home products, tablets and televisions which are connected through its MIUI operating system. It made a RMB43.8bn ($6.6bn) net loss in 2017 from revenues of RMB115bn.

The offering was originally intended to be a dual offering that would have raised up to $10bn, but Xiaomi was forced to drop the Shanghai portion, reportedly after failing to answer several questions from Chinese regulators.

Despite the setbacks, the offering is the largest in the tech space since e-commerce firm Alibaba floated in 2014. Seven cornerstone investors had pledged to buy a combined 10% of the shares, but Reuters reported today that they invested $548m in the offering.

The investors in question include Qualcomm, which held a stake worth less than 0.1% of Qualcomm prior to the IPO, as well as telecommunications company China Mobile, logistics firm SF Express, the state-owned China Merchants Group and investment firm CICFH Entertainment.

The IPO comes after more than $1.5bn in equity financing for Xiaomi, which was valued at $45bn as of its last funding, a $1.1bn round backed by DST Global, GIC, Hopu Fund, All-Stars Investment and Yunfeng Capital in 2014.

NGP Capital, the venture capital firm spun off from communications technology producer Nokia, is also an investor, though its stake is sized at less than 0.1%. Other backers include Temasek, IDG Capital, Morningside Venture Capital and Qiming Venture Partners.

CLSA, Goldman Sachs and Morgan Stanley are joint sponsors for the offering, while Bloomberg identified Credit Suisse, Deutsche Bank, JPMorgan Chase and six China-based banks as additional underwriters.

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