The Chinese smartphone leader, Xiaomi has filed for world’s biggest IPO after 2014. The smartphone maker will be using Hong Kong’s new rules for going public.
Xiaomi Corp is getting a huge benefit the changes in the former British Colony. The companies with different share classes can list in Hong Kong. The Chinese smartphone giant is expected to raise at least US$10 billion (S$13.3 billion). The company’s valuation can touch US$ 100 billion with this IPO.
The smartphone maker has not published the detailed financial report yet. Xiaomi had reported net losses of 43.9 billion yuan (S$ 9.2 billion) in the last year. On the other hand, Xiaomi had recorded profits for the year earlier. However, profits dipped last year due to the company’s global expansion plans. Which helped the company in clocking revenue of 114 billion yuan last year.
The officials of Hong Kong Exchanges and clearing have spent years pushing to scrap a ban on weighted voting rights. The officials don’t want the founders and executives control even the minority ownership. The listing is a big win for the Hong Kong exchanges.
After Alibaba’s US$ 25 billion IPO in 2014, this could the biggest IPO in the history. Xiaomi suffered through several challenges in during 2016. However, the new leadership has helped Xiaomi bounce back. The company has revamped its sales model and revenue figures in India as well.
Xiaomi Corp is expected to issue Chinese depository receipts (CDRs) after the company goes public. The smartphone maker has picked critic securities to handle CDR insurance. Chinese state council has also approved the CDRs plans.
According to Xiaomi’s co-founder and CEO, Lei Jun, issuing CDRs is an excellent idea. This could lead to a great policy innovation. The company is fighting to win the smartphone market in the developed nations. In the emerging markets, Xiaomi is relying on consolidating its position.
Apart smartphones, the Chinese tech firm has several startups producing a wide range of smart products. The company is pushing its sales efforts in Spain and the US. The company is said to be talking to US carriers to sell Xiaomi smartphones.