AgBank smashes world IPO record
A HONG Kong and Shanghai stock market listing of shares in Agricultural Bank of China (AgBank) has become the world’s largest ever initial public offering.
AgBank said yesterday it had fully exercised an over-allotment option for the Shanghai portion of the stock market listing, boosting total proceeds from the offer to $22.1bn (£14.2bn).
The previous record for the world’s largest IPO was held by the bank’s domestic rival Industrial and Commercial Bank of China (ICBC), which completed a $21.9bn IPO four years ago.
The exercise of the over-allotment, known as a “greenshoe”, brings the number of shares sold in AgBank’s Hong Kong and Shanghai offerings to 54.79bn, increasing the original $19.3bn raised by 15 per cent.
AgBank had already exercised a similar option for its Hong Kong portion last month.
Over-allotments are released when demand for the shares in the after-market is heavy. Underwriters release the shares, set aside at the original IPO price, to the allocated holders who then become public stockholders. However, the bank – which began trading on the two stock markets in the middle of last month – had feared that the over-allotment quota could be clawed back by underwriters after a weak debut. Its share price has struggled to retain its value over the first weeks of trading in tepid market conditions.