Xiaomi Confirms at Least Half of IPO to Be Sold in Shanghai

Xiaomi Confirms at Least Half of IPO to Be Sold in Shanghai
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Xiaomi said at least half of the stock in its planned initial public offering will be sold to mainland investors through Chinese depository receipts, according to Bloomberg.

CDRs will account for at least 7 percent of the company’s share capital, the Beijing-based company said in a filing. Xiaomi is planning to raise $10 billion from its IPO with the shares to be split between Hong Kong and Shanghai, people familiar with the matter have said.

Xiaomi’s statement is the biggest vote of confidence yet in China’s push to bring more of its major technology companies to domestic exchanges. Selling more equity to mainland Chinese investors aligns Xiaomi with Beijing’s policy goals and could help it command a higher valuation.

The company is targeting a valuation of about $75 billion although that number could also shift, the people familiar said. Analysts at JPMorgan, Morgan Stanley and CLSA, all of which are sponsoring or arranging the IPO, put Xiaomi’s price tag at anywhere from $65 billion to $100 billion depending on the metrics used. The eight-year-old company has said the share sale will be used to fuel expansion beyond China and bankroll the development of devices and media services.