Chinese smartphone maker Xiaomi is set to become the largest tech listing across the world this year despite its last-minute decision to pull its application for a mainland share offering. Xiaomi surprised the market as the Chinese company was believed to become the first to sell Chinese depository receipts (CDRs), which allow investors in mainland China to purchase shares despite the listing taking place in Hong Kong. The Beijing-based company will offer 2.18 billion shares priced between HK$17 billion and HK$22 billion, raising up to HK$48 billion ($6.1 billion) in Hong Kong, the company announced during the weekend. It will give the company a valuation between $54 billion and $70 billion, a notable discount on the widely-expected $100 billion valuation by the market previously. China’s stock exchange watchdog the China Securities Regulatory Commission had confirmed on June 7 that it received applications from Xiaomi to issue a CDR, one day after the regulatory body unveiled rules for innovative firms to issue CDRs in the domestic capital market in China. But on June 18, Xiaomi said it will list in Hong Kong first, and look for an opportunity to list the shares through CDRs in mainland China later. The decision was made after several rounds of discussions with the Chinese regulators, which reached a consensus that Xiaomi should go for an listing in Hong Kong first to ensure the quality of its CDR issuance in mainland China later, said Xiaomi’s CFO Shou Zi Chew during a press conference in Hong Kong… [Read full story]
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