China’s Agricultural Bank raises $19.2 billion from Hong Kong and Shanghai IPO

Agricultural Bank of China Limited (ABC), one of the big four Chinese banks, which may end up with the world's largest initial public offering (IPO), yesterday sold $19.2 billion of stock in Hong Kong and Shanghai stock exchanges.

If ABC is to exercise its option of retaining 15 per cent of the excess subscription, also referred to as a greenshoe option, the IPO could exceed $22 billion - the largest in history and overtake the current record holder, fellow rival, Commercial Bank of China, which raised $21.9 billion when it went public in 2006.

The ABC issue price, which will start trading in mid-July, was yesterday fixed at HK$3.20 per share for the Hong Kong portion of its IPO offering, while it was priced at CNY2.68 per share for the Shanghai part, where only Chinese nationals could buy the stock.

The Nikkei said today that ABC may raise Y40 billion-Y50 billion in Japan, offering the IPO to Japanese investors, who are keen to participate in the booming Chinese economy.

According to media reports, more than 500 institutional investors have applied for ABC's IPO, of which, 46 per cent were from Asia, 30 per cent from the US and around 24 per cent from Europe.

Eleven cornerstone investors like sovereign wealth funds of Singapore, Qatar and Kuwait and others, have taken about $5.5 billion worth of the Hong Kong share offering.