Xiaomi is set to be one of the world’s biggest IPO

Xiaomi today launched what is set to be one of the world’s biggest initial public offerings, filing a prospectus to raise up to $10 billion that gives investors their first look at the Chinese smartphone maker’s financial details. It is due to list in Hong Kong in early July. The deal would be the biggest IPO globally since Alibaba’s $25 billion float in New York in 2014… Xiaomi made an operating profit of Rmb12.2 billion ($1.9 billion) last calendar year, triple the previous year… Proceeds from the IPO, which analysts and bankers expect to value the company short of the $100 billion originally touted, will be split in roughly equal parts among research and development, investments in the “internet of things” (IoT) and other areas designed to boost its software platform, and global expansion. Xiaomi has already invested in over 90 IoT and lifestyle companies and has become the top smartphone seller in India, with a 31 per cent market share… The flotation would be one of the first to take advantage of changes to HKEX’s listing regime, made last month, which allow for companies to list with weighted voting rights for the first time… Unlike the traditional “one share, one vote” structure, weighted voting rights give greater voting power to founders of companies over ordinary shareholders. The structure is popular among entrepreneurs and in technology companies where founders want to retain a degree of control over the direction of the company.
Louise Lucas and Emma Dunkley