The Chinese smartphone maker Xiaomi is reportedly seeking to raise at least $10bn by floating on the Hong Kong stock exchange, in what could be one of the world's biggest initial public offerings in years. With the listing, the value of the company can go up to $100 billion and could be the biggest Chinese tech IPO since Alibaba Group Holding Ltd raised about $21.8 billion in the year 2014.
Xiaomi is applying for a Hong Kong stock listing with dual share classes that give certain shareholders much more power, which the new rules allow.
The Lei Jun-led, Chinese phone-making giant has picked Hong Kong to list its shares, a victory for the Chinese city which missed out on blockbuster stock offerings by Alibaba and other rising internet companies in mainland China in recent years.
When it revealed detailed financial info for the first time in 2017, Xiaomi posted a net loss of $6.9 billion, despite revenues of $18bn.
According to the prospectus presented, the company's revenue has hit 114.62 yuan ($18 billion, ₹1.19 lakh crore) in 2017, which is 67.5% ahead of where it was in 2016. Xiaomi was the fastest growing brand in China during the quarter. This is mostly due to the success of Xiaomi's Redmi Note 5 and 5 Pro models that were launched, earlier this year. In 2017, Xiaomi's Mi Home stores made 240,000 yuan or about $37,700 in annual sales per square meter which, according to iResearch, is "the second highest average sales per square meter amongst retail store chains globally".
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Interestingly there's no mention of expanding phone sales to the US, but Xiaomi has pledged to put 30 percent of its IPO towards growing its presence in Southeast Asia, Europe, Russia "other regions".
Founded in 2010, the Chinesecompany was the fifth biggest smartphone maker in the world previous year, shipping more than 92 million devices, according to research firm IDC. "Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core".
In March 2015, the head of the company's top lawyer Zhang Liang told Legal Week there were no plans for a listing within the next five years. A special voting structure that allowed the founders and the promoters control the company even with minority stakes.