Xiaomi is planning to split its initial public offering between Hong Kong and mainland China, Reuters reports, citing sources close to the Beijing-based company. While the original equipment manufacturer was first expected to fully list itself on the Hong Kong Stock Exchange as part of its summer efforts to raise some $10 billion in cash, up to $3 billion of that sum is now meant to be raised outside of the autonomous territory. The smaller portion of the funds is likely to be raised through new Chinese Depositary Receipts (CDRs), as per the same report. Xiaomi has yet to receive the final approval of its IPO plans from Beijing's securities regulators, with the green light being expected to arrive by the end of the week.
While the company was first targeting a $100 billion valuation, it's said to have lowered its ambitions earlier this spring to a range between $70 billion and $80 billion. The IPO itself is likely to be the most valuable tech float since Alibaba went public in 2014 with a valuation of $163 billion, raising $21.8 billion in the process of doing so. A dual-listing strategy is seen as a safer bet than a traditional IPO by some industry watchers as Xiaomi's targets are still widely interpreted as aggressive. Some investors remain skeptical about the company's overall prospects, pointing to the stagnation in the Far Eastern country and thin profit margins as the main reasons behind their concerns.
Xiaomi is presently the world's fourth-largest smartphone vendor, being behind Huawei, Apple, and Samsung. It also declined in its home country over the course of the last several years and is now trailing Vivo, OPPO, and Huawei. Its most promising foreign market is India where the firm is already challenging Samsung for the title of the most successful handset company by both shipments and sales, only three years after entering the South Asian country. Xiaomi's IPO is expected to take place in the first half of July.