Xiaomi IPO Raises HKD 24 Billion, Trading Starts From July 9

Technology startup Xiaomi has raised a total of Euro 2.6 billion or 24 Billion Hong Kong Dollars from its IPO (initial public offering). Trading of its share will start from 9 July (Monday) at a valuation of around $54 billion.

Xiaomi sold 109.98 million shares to the Hong Kong investors and 2.4 billion shares in the international market. The firm kept the share price at HKD 17, the lowest in the indicative range of 17-22 HKD. The company claimed its shares were over subscribed by 9.5 times for the IPO.

Qualcomm and China Mobile are among many instituinal investors who bought stakes in the company. Both these firms acquired 0.21% stake each in Xiaomi.

The company had filed the initial documents of the IPO in May and had said then that it does not expect more than 5% profit in future, starting from 2018. And if there is more profit, it will be passed on to the company’s users, Xiaomi said in the filing.

“Amazing products, honest pricing” comes with real action. At this point, I would like to pledge to our existing and potential users, starting in 2018, Xioami’s hardware business overall net profit margin will not exceed 5% per year. If the net margin exceeds 5%, we will return the excess to our customers,” Xiaomi Chairma Le Jun had said.

In terms of markets, China is the company’s biggest market and India is its most successful international operations.

Xiaomi mentioned in the filing that from the IPO proceedings, it will invest 30% of the fund in expanding its business in international markets including Russia, Europe and South East Asia. Another 30% will be invested in R&D and 30% in IoT products and solutions. It had kept 10% of the funds for working capital.

At the end of March 2018 Xiaomi has a total of 14,513 employees out of which 13,935 are based out of Mainland China. The rest are distributed in India, Taiwan, Indonesia and other countries.

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