Xiaomi reportedly plans $3b Chinese Depository Receipts in mega IPO

It may raise 30% of shares in the Mainland and the rest in Hong Kong.

Reuters reports that smartphone maker Xiaomi is planning to raise up to 30% of its blockbuster $10b flotation by selling shares in the Mainland whilst offering the remainder in Hong Kong.

Also read: Blockbuster IPOs buoy Hong Kong loans 17.4% in April

The company is working towards a simultaneous offering of Hong Kong shares and Chinese Depository Receipts (CDRs) in mainland China in early or mid-July, sources told Reuters. Under the tentative timetable, Xiaomi plans to price its Hong Kong and China share offerings on the same day and begin trading in China a day before its shares float in Hong Kong. 

With CDRs, companies that already trade on overseas exchanges, including Alibaba and Tencent Holdings Ltd., would issue securities that could be purchased in mainland China. 

A dual listing by the smartphone maker could easily set the tone for future CDR offerings and provide a much-needed boost to meet a $70b plus valuation target.

Xiaomi has officially filed for an IPO in Hong Kong in what could be the world’s biggest public listing since Alibaba's $25b public debut in 2014. The smartphone maker is the first major firm to take advantage of sweeping reforms introduced by the bourse operator allowing companies with dual class shares or weighted-voting rights to list.

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