Xiaomi Kicks Off IPO on Hong Kong Stock Exchange, Plans to Raise $6.1 Billion

Finally, after a lot of back and forth, Xiaomi has gone live on the Hong Kong stock exchange giving the kick-start to one of the largest Initial Public Offerings (IPO) of the world right now. The latest news has surfaced after the Chinese tech giant scraped its plan of listing on the Shanghai stock exchange. The company which has eyed the IPO for quite some time now plans to raise around $4.7 billion to $6.1 billion from its IPO at the Hong Kong stock exchange. What Xiaomi now expects to raise is somewhat lower than the price which the Lei Jun led company had expected to raise before. The company had pegged the figure to be around $10 billion when the news of IPO first surfaced. Although the price has come down from the previous figure, the current valuation is also not less by any measure. As per previous reports, the amount which Xiaomi will be raising from the Hong Kong stock exchange will be used to fuel its operations in countries of South Asia, Europe, and Latin America. Also, recently the Chinese manufacturer has stepped into the European market by making its way into Italy.

xiaomi-ipo-filing-hongkong

Lei Jun, CEO of Xiaomi presented some stats in a press conference held in Hong Kong. The executive said that the company plans to sell around 2.2 billion shares to various investors around the world during its IPO. The individual shares are priced in the range of 17 to 22 HK Dollars ($2.20 to $2.80). The Hong Kong IPO opened at 9.00 AM today and is said to close at noon on June 28.

James Paradise, Asia-Pacific President of Goldman Sachs, talked about the fact that the company has attained impressive valuation although it has come into existence only ten years back, he said speaking about Xiaomi’s IPO. He highlighted that the Chinese OEM is itself valued in between $54 billion to $70 billion, which although is lower than its self-proclaimed valuation of $100 billion, it is still a remarkable figure to boast of.

Apart from breaking the news about its initial public offering and the cancellation of its plan to list in the Shanghai stock exchange, the company came clean about its roadmap of investing its raised capital.

Xiaomi revealed that it plans to divide the raised capital equally into R&D of core in-house products including smartphones, TVs, AI speakers, etc. The rest of the capital would be invested for expanding into international markets, while the other part will be allocated to AI development. The rest 10% of capital is earmarked for general corporate purposes. There was also an interesting announcement where Lin Bin, Co-founder and President of Xiaomi said that the CEO Lei Jun would be awarded stocks worth $1.5 billion for his ‘contributions towards the development of the company’.

Using this new fundraising in the Hong Kong stock exchange, the company plans to accelerate its operations in the foreign countries. It is noteworthy that the Chinese OEM is already operational in 74 countries across the world and it plans to expand its operations more in the coming months. The IPO is of very strategic importance to the brand since it might fuel the journey of Xiaomi making its place into the list of top smartphone brands in the world.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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