Xiaomi is moving forward with its previously rumored plan to hold an initial public offering in 2018, Reuters reported on Wednesday, citing several people close to the Beijing, China-based phone maker. The company is already said to have asked banks to pitch their ideas next Friday after a period of related discussions with various financial institutions. The company is expected to settle on its IPO destination after it evaluates all proposals but is still most likely to opt for Hong Kong over New York, as was previously reported.
While Xiaomi has a long history of dismissing ambitions to go public, its top management and investors still see this as an apt opportunity for such a move, with the firm's 2017 performance surging to unexpected heights after extremely positive results in China and India, two of the world's largest smartphone markets. In its home country, Xiaomi managed to take back the title of the fourth largest phone vendor in China from Apple, whereas it's seriously threatening to dethrone historically dominant Samsung in India where it's now virtually on par with the Seoul-based tech giant's sales and shipments. Following two years of disappointing performance, Xiaomi's 2017 results are seen as the first occasion on which the company lived up to the 2014 expectations set after a private funding round that saw it valued at $46 billion, with that figure shortly surging to $55 billion. The current climate is seen as being largely conducive to an IPO due to the optimism regarding the firm's long-term prospects, with the Chinese OEM not being willing to settle for a valuation below $50 billion, Bloomberg reported earlier this week.
The latest development is based on accounts of people who believe that the firm's expected revenues would make even a $100 billion valuation feasible, though such a figure still doesn't appear to be part of any realistic scenario. Even with a significantly lower valuation, Xiaomi would likely raise north of $10 billion by going public, so long as it maintains its current performance. Xiaomi founder and CEO Lei Jun previously didn't plan for a public listing prior to 2025 but changed his mind after seeing initial financial projections associated with such a move, sources say. Should the company officially greenlight its ambitions to go public, it's expected to organize the world's third largest tech IPO after Alibaba and Facebook which were valued at $167.4 billion and $104.2 billion, respectively.