Xiaomi some of the money: Smartphone giant scales back IPO

22 Jun 2018

Xiaomi headquarters in Beijing, China. Image: Testing/Shutterstock

Despite scaling back its plans, the Xiaomi IPO will still be the biggest IPO out of Asia this year.

In what is one of the hottest initial public offerings (IPOs) of 2018, Xiaomi is going to float on the Hong Kong Stock exchange to raise $6bn but has postponed plans to list in Shanghai in what may have reaped it $10bn in investment.

This will still be one of the biggest tech IPOs from Asia since Alibaba made its $25bn stock debut in 2014.

CEO Lei Jun will outline plans for the IPO on Saturday (23 June).

Xiaomi had hoped to raise $10bn with its Hong Kong and Shanghai dual listing in a debut that would have valued the company at $100bn. Reports suggest the latest plan will value it in the range of $70bn.

The consumer electronics giant had hoped to be one of the first companies to list shares in Hong Kong as well as launching new Chinese Depository Receipts (CDRs) in Shanghai in a bid to open China’s stock markets. However, this week it put off its decision to list CDRs until the Hong Kong IPO is completed.

Either way, it is a compelling situation to watch as the mobile maker propels itself to take on established smartphone giants such as Samsung and Apple.

The Android dragon

Cornerstone investors in the Hong Kong IPO include Qualcomm, Chinese express delivery company SF Express, China Mobile, Chinese state investment firm CICFH Entertainment and state-run conglomerate China Merchants Group.

Xiaomi is on its way to becoming a global brand and the company is already striking into Europe with plans for a signature store in Paris. Siliconrepublic.com recently reported how the company is entering the market in Ireland and the UK through a relationship with Three.

It has, in just eight years, emerged to be the fourth-largest smartphone maker by shipment.

Xiaomi was founded in 2010 by serial entrepreneur Lei Jun and it released its first Android-based smartphone, the Mi 1, in 2011.

Prior to revealing its IPO plans, the company was ranked as the world’s fourth most valuable tech start-up after receiving $1.1bn in funding from investors including DST Global, All-Stars Investment and GIC in 2014, valuing it at $46bn at the time.

The company employs 15,000 people in China, India, Malaysia and Singapore and is expanding to Indonesia, the Philippines and South Africa.

Xiaomi headquarters in Beijing, China. Image: Testing/Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years