PICC raises US$3.1b in Hong Kong's biggest IPO this year

People’s Insurance Company (Group) of China, the nation’s biggest property insurer, raised HK$24 billion (US$3.1 billion) in Hong Kong’s largest initial public offering in two years, two people with knowledge of the matter said.

PICC Group sold about 6.9 billion shares at HK$3.48 apiece, near the bottom of a marketed range, said the people, asking not to be identified because the information is private. The IPO is the largest in Hong Kong since October 2010, when AIA Group raised US$20.5 billion, data compiled by Bloomberg show.

The insurer defied a 78 per cent slump in the value of Hong Kong IPOs this year, thanks in part to US$1.82 billion of pre- negotiated investments with American International Group and 16 other so-called cornerstone investors, to complete the offering. Before the sale, companies had raised US$3.5 billion in Hong Kong IPOs this year, the lowest for similar periods since 2001, data compiled by Bloomberg show.

An external spokeswoman for PICC Group declined to comment on the final price.

Founded in October 1949, PICC Group offers property, casualty, life and health insurance products. It had about 130 million individual customers and 2.4 million institutional clients at the end of June, according to the prospectus.

PICC Group is the biggest property insurer in China with 163 billion yuan in premium income for the first 10 months of this year, according to the website of China Insurance Regulatory Commission.

The shares were originally marketed at HK$3.42 to HK$4.03 each, according to a prospectus for the offering, which accounts for about 16.7 per cent of the insurer’s enlarged share capital. Based on the per centage, the sale values PICC Group at US$18.6 billion.