Foxconn unit gets green light to start fundraising for US$4.3 billion IPO, China’s biggest in three years

Foxconn Industrial Internet, a unit of the world’s biggest contract manufacturer whose products include Apple’s iPhones, edged closer to an initial public offering of 27 billion yuan (US$4.27 billion) after Chinese regulators gave it the green light to start fundraising.

It is expected to be the largest IPO on the mainland for three years and comes as Beijing steps up efforts to encourage listings of technology firms on the domestic stock exchanges.

The company, controlled by Taiwanese billionaire Terry Gou, confirmed in a filing on Monday morning that it will target total proceeds of 27 billion yuan, in line with the amount it published in its IPO prospectus.

The China Securities Regulatory Commission said at the weekend that the listing date for Foxconn will be fixed by the Shanghai Stock Exchange after it consults with the underwriters.

The announcement ended speculation that the regulator was hesitant to approve the IPO due to worries about a market downturn. There had also been speculation that Foxconn might scale down the IPO because of weakness in the market.

Foxconn aims to raise 27 billion yuan by floating 1.8 billion shares, or 10 per cent of its capital, on the Shanghai exchange. It will use the proceeds to fund eight new projects including cloud computing, building a data centre, 5G mobile network technology, “internet of things” projects and expansion into so-called intelligent manufacturing, according to its stock sale prospectus.