Beijing-Shanghai High-speed Railway cuts IPO size but is still on track for China’s biggest offering since 2015
- The operator of the high-speed rail link said the IPO volume would be slashed to 6.29 billion shares from 7.56 billion shares, without explaining why
- The company could still raise 29.2 billion yuan (US$4.2 billion), the most in mainland China’s stock market since Guotai Junan Securities in 2015
The operator of the high-speed railway linking Shanghai and Beijing has scaled down the size of its initial public offering (IPO) by 17 per cent, without saying why.
But the IPO, which is expected to net almost 30 billion yuan (US$4.3 billion), could still become mainland China’s largest new share offering since 2015.
Beijing-Shanghai High-Speed Railway said in a filing to the Shanghai Stock Exchange on Wednesday that the IPO volume would be slashed to 6.29 billion shares, down from the previously announced 7.56 billion shares. It did not elaborate.
The company was approved for IPO by the China Securities Regulatory Commission (CSRC) on November 14.
It said the IPO proceeds would be used to buy a stake in the Beijing Fuzhou Railway Passenger Dedicated Line Anhui Company, which is valued at 50 billion yuan.
“The company’s IPO shares will draw huge subscriptions due to its stable earnings growth and its role in the national economy,” said Zhou Ling, a hedge fund manager at Shanghai Shiva Investment.
The price consultation process will end in early January.
Under regulations that could soon be relaxed, companies can price IPO shares at anything up to 23 times their price-to-earnings ratio.