Tianqi Lithium to offer Hong Kong IPO at top of price range, as improving sentiment offers hope for companies awaiting the ‘right moment’

Tianqi Lithium will price its H-shares at HK$82 each, which will help the company raise HK$13.5 billion (US$1.7 billion)

The stock, trading under the mnemonic 9696, will make its debut in Hong Kong on July 13

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A worker on a production line at a lithium battery manufacturing plant for automotive use in Tangshan, of Hebei province on April 11, 2019. Photo: Xinhua

Published: 4:03pm, 6 Jul 2022Updated: 9:10pm, 6 Jul 2022

Corrected [6:12pm, 6 Jul, 2022]

[6:12pm, 6 Jul, 2022]
Corrects pricing in the headline and the second paragraph

Tianqi Lithium will price its Hong Kong stock sale at the high end of a range, as improving market sentiments buoyed the city’s largest initial public offering (IPO) this year, auguring well for nearly 200 companies waiting in the pipeline to raise funds.

Each share of Asia’s second-largest lithium compound producer will be offered at HK$82, which will help Tianqi raise as much as HK$13.5 billion (US$1.7 billion), according to people familiar with the transaction. The stock, trading under the mnemonic 9696, will make its debut in Hong Kong on July 13.

There is an overallotment option to sell 24.6 million (389) more shares if there is strong demand, which could increase the total capital raised to almost US$2 billion if the option is fully exercised. Joint sponsors and joint global coordinators CICC, CMB International and Morgan Stanley were not available for comment.

Tianqi’s A-shares retraced by 2.3 per cent on Wednesday after soaring to a record 147.17 yuan (US$21.95) a day earlier. Pricing the Hong Kong offer at the top of the HK$69-to-HK$82 range augurs well for Hong Kong’s stock market, which skidded to 10th place during the first half in the worldwide ranking of IPO destinations, as the Covid-19 pandemic combined with rising interest rates and a downbeat market to deter fundraising.

An undated photograph of a lithium mine operated by Bikita Minerals in the Masvingo province of Zimbabwe. Photo: Handout.

Almost 200 companies have applied to raise capital in Hong Kong, awaiting the right moment to kick off their IPOs, said Nicolas Aguzin, chief executive of Hong Kong Exchanges and Clearing Limited (HKEX), during an interview with South China Morning Post last month.

Half of the 20 new issuers which have raised funds in Hong Kong during the first half priced their deal at the bottom-end of their marketed range, data from Deloitte shows, as investors’ concern about IPO post-listing performance and growing recession concerns had forced issuers to settle for lower valuations.

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