Xiaomi picked a number of banks meant to assist the company in its efforts to go public later this year, Bloomberg reported Monday, citing a source close to the Chinese tech giant. Goldman Sachs Group and Morgan Stanley will be part of the team responsible for what's widely expected to be the largest initial public offering in the tech segment, with Deutsche Bank and Credit Suisse Group also being on the list of the firm's new banking partners. More financial institutions are understood to be involved in the IPO plan but their names are yet to revealed, officially or otherwise. The original equipment manufacturer has yet to pick a single partner from its home country of China and hasn't made a final decision in regards to the location and timing of its IPO, according to the same insider, with previous reports suggesting Hong Kong is by far the most likely destination for Xiaomi.
The Beijing-based OEM's pick of banks isn't indicative of the location of its IPO, with all of its supposed partners having a major presence in most parts of the world. The role of banks is important in the traditional process of listing a company on the public markets as such partners serve as underwriters that commit significant resources to accurately estimating the value of any given IPO and thus provide some assurances to investors in exchange for a fee incorporated into the initial price of their client's shares. Every conventional IPO has a lead underwriter that dictates the process but it's currently unclear who will play that role in Xiaomi's act of going public.
The company's last funding round was conducted in 2014 and saw it valued at $46 billion, with that figure having the possibility to more than double should Xiaomi maintain its performance until the IPO, according to previous reports. Even though the firm struggled to continue its international expansion while still fighting off domestic rivals like Huawei and OPPO in both 2015 and 2016, last year saw its resurgence of sorts, primarily driven by strong growth in India, the world's second largest smartphone market. The newly reported state of Xiaomi's plan to go public suggests its roadshow may start in mid-2018.