China's PSBC to raise $7.4 bn in Hong Kong IPO
The Dollar Business Bureau
Postal Savings Bank of China (PSBC) is planning to raise $7.4 billion in initial public offering (IPO) at Hong Kong bourse, which is estimated to be the biggest flotation in the world this year, according to reports.
The listing is also said to be the largest since internet major Alibaba floated in 2014 in New York, raising $25 billion.
However, the $7.4 billion valuation of the company is on the lower $8.1 billion mark, which it earlier hoped for, as analysts believe that demand for its stock is still lukewarm.
PSBC will issue 12.1 billion shares at a value of HK$4.76 ($0.61) each, when it floats on September 28, on the Hong Kong bourse, Bloomberg stated while quoting people familiar with the issue.
The price valuation of the company is at the lower end of the original price range of the bank, which put the value of shares between the range of HK$4.68 and HK$5.18.
PSBC is the fifth largest lender in China having 40,000 branches all over the country, having 70% branches in rural areas.
Established in 2007, the bank offers basic banking solutions to farmers as well as agricultural business owners. It is the only financial institution with presence in some of the remotest regions of China.
As per the recent figures, the total assets of PSBC reached 7.7 trillion yuan (around $1.15 trillion) by the end of March. The bank’s net profit increased 11% to 12.48 billion yuan on year-on-year basis in the first quarter.