CGN Power is set to allocate most of the shares under its Rmb12.4 billion ($1.76 billion) initial public offering in Shenzhen to retail investors after they put in orders of more than 400 times the shares available to them.
China’s largest nuclear energy producer said that it had received applications for as many as 306 billion shares for the 757 million shares available under the retail tranche. As a result of the robust demand, the company has exercised the clawback option and enlarged the retail tranche to 1.84 billion shares.
With half of the 5.05 billion-share IPO already allocated to strategic investors before bookbuilding began on Monday, the retail portion now accounts for 73% of the shares available to public investors. Institutional investors took around 682 million shares.
The transaction was the centre of attention for mainland stock market investors this week because it is set to be the largest ever IPO on the Shenzhen Stock Exchange, which typically hosts private companies that are smaller in scale.
In comparison, the Shanghai Stock Exchange is the home of most of China’s state-owned enterprises.
State-owned CGN Power has bucked the trend by listing in Shenzhen, which is where its headquarters are located. CGN Power operates the Daya Bay complex, China’s largest nuclear power facility, which supplies electricity to Shenzhen and Hong Kong.
The IPO will also be the largest mainland listing in more than a year, since Foxconn Industrial Internet’s $3.5 billion deal in May last year.
The company has set the offer price at Rmb2.49 per share, which is identical to the HK$2.78 offer price for its Hong Kong IPO at the current exchange rate. CGN Power raised $3.2 billion through its Hong Kong listing in December 2014.
Proceeds from the Shenzhen IPO will be used for operations in two of the company’s nuclear facilities located at Yangjiang of Guangdong province and Fangchenggang of Guangxi province.
The 2.2 gigawatt Yangjiang nuclear project began operations in July this year, while the 2.4 gigawatt Fangchenggang facility is scheduled to start in 2022.
CICC is the sole sponsor of CGN Power’s Shenzhen IPO.