China Mobile’s largest company by revenue in the wireless network category is set to grow from its listing on the Shanghai stock exchange $8.78 billion. This makes it the world’s largest public offering in 2021, thanks partly to support from the state.
The state-run China Mobile was delisted from the New York stock exchange earlier this year because of any investment ban by former president Trump. The company will also exercise eats over-allotment option for the offer as there is a strong demand from domestic investors, both state and retail.
The offering would make the company raise a total of 56 billion Yuan, the second largest after the Rivian Automotive Inc IPO of $13.7 billion as per Bloomberg Data. This offering will be one of China’s domestic stock market’s top 10 largest share offers in the last decade. A total of $ 80 billion was raised in 2021 by companies in Mainland China, up by 17 % from 2020.
The China mobile offer has attracted strategic investors such as China Culture Industrial Investment Fund, National Council for Social Security Fund, National Integrated Circuit Industry Investment Fund, State Development & Investment Corp, China-Africa Development Fund, China FAW Group Co, and State Grid Yingda International Holdings Co along with China Life Insurance and Brunei Investment as per the filing.
In January this year, NYSE stopped trading for China Mobile and other state-owned companies like China Unicom and China Telecom. This was in response to China barring investments in Chinese companies from the U.S. as it considered a threat from the Trump administration to national security. In August, China Telecom was listed in Shanghai after raising $ 7 billion. The China United Network Communication is trading in the Shanghai stock exchange.
The 19 strategic investors will pick up shares in Yuan worth 24.3 billion. This will be 49.9% of the planned A-share consisting of 845.7 million shares. They will be subjected to a lock-in period of 12 months to 36 months.
The over-allotment portion of 126.86 million shares will be allotted to retail investors. China mobile earlier this week had informed that the A-share offering was 805.68 times oversubscribed by retail investors.
The proceeds from this offering will fund the expansion of the 5G network, smart living projects, cloud infrastructure, and tech development.
These projects will cost China Mobile Limited 157 million Yuan in total, as per the company statement.
