Hot pot chain Haidilao defies market slump after raising nearly US$1b in IPO

The firm sold around 8% of equity capital at $17.80 per share.

Reuters reports that Beijing-based hot pot chain Haidilao is said to have raised nearly US$1b ($7.84b) in an IPO priced at the top end of its marketed range in a move that bucks the declining trend in the local bourse which recently entered into bear territory. 

The fast-growing eatery sold around 8% of its enlarged equity capital at $17.80 per share in its share sale that attracted investment house Hillhouse Capital Group and Morgan Stanley who earlier pledged to buy around US$375m worth of shares as cornerstone investors.

Founded in 1994 by former tractor factory worker Zhang Yong, Haidilao is best known for its spicy Sichuan-style hotpot and entertainment service to waiting customers which can range from manicures to board games. It has more than 360 restaurants across the Mainland and presence in Japan, South Korea, US and Singapore.

Haidilao initially offered a total of 424.5 million shares priced at $14.80 to $17.80 apiece.

The company’s high IPO proceeds gives the hotpot chain a valuation of about US$12b, giving the firm a market cap greater than all 33 eatery companies traded in the Hong Kong bourse. The next restaurant operator with the second largest market cap after Haidilao is Xiabuxiabu which has a valuation of US$1.6b followed by Cafe de Coral at US$1.4b.

Haidilao's share sale is the latest on a packed Hong Kong consumer IPO calendar over the coming months which includes online food delivery-to-ticketing services platform Meituan Dianping and Alibaba-backed online parenting firm Babytree Group. 

The hotpot chain is planning on using the proceeds to fund its international expansion into the UK and Canada as well as to develop and refine food safety technologies.

Here’s more from Reuters:

Photo from Haidilao's Facebook page