Kunming Dianchi Water Treatment prices IPO at bottom

Investment only trickles in for deal at a time when industry transformation in China poses execution risks.

Yunnan's largest wastewater treatment and reclaimed water supplier, Kunming Dianchi, priced its initial public offering at the bottom of the range on Thursday, raising HK$1.3 billion $171 million pre-greenshoe.

Pricing at HK$3.91 was no great surprise given market conditions have softened since book building began and the company has yet to prove it can transition to the new public private partnership PPP model the Chinese government wants future industry projects to be run on.

Observers said the retail and institutional order book both closed covered, with retail allocated 10% and institutions 90% of the 339.4 million share deal pre greenshoe.

The...

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