Xiaomi taps banks for IPO worth up to $100 billion
Xiaomi has tapped CLSA, Goldman Sachs and Morgan Stanley as joint sponsors for its proposed IPO, people with direct knowledge of the matter said, in what could potentially value the Chinese smartphone maker at up to 100 billion US dollars.
The initial public offering could be the world’s biggest tech float in 2018 and is expected to come in the second half of the year.
Xiaomi has separately tapped Credit Suisse and Deutsche Bank to work on its IPO. However, the roles for global banks haven’t been decided and that no formal mandate has been given to any Chinese bank.
The smartphone maker last month told bankers that it would beat its 2017 sales targets by up to 18 percent as it continues to benefit from a business overhaul that followed its over-expansion and fierce competition from domestic rivals including Oppo and Vivo.
Bankers expect Xiaomi’s profits to rise sharply in 2018 as its rebound continues, and have told the company – valued at 46 billion dollars in a 2014 funding round before its slump – that a 100-billion-dollar valuation at the IPO is possible.
The smartphone maker will add more banks to its IPO later in the process, and Credit Suisse, Deutsche Bank, JP Morgan and two Chinese banks were expected to get the nod for roles as joint global coordinators.
Xiaomi’s potential IPO – most likely in Hong Kong, according to sources – would headline a series of hotly-anticipated Chinese tech floats in the city this year. Other expected listings include Lufax, the wealth management platform backed by insurance group Ping An.
Lufax, China’s largest online wealth management platform, is expected to sell 6 billion dollars to 9 billion dollars of shares in its IPO, and is seeking a valuation of 60 billion dollars.
In all, bankers anticipate tech companies worth up to 500 billion dollars could seek IPOs in Hong Kong or New York over the next two years, encouraged by investor enthusiasm for recent tech floats and buoyant stock markets.