Foxconn to raise $4.3bn in China’s biggest IPO since three years
Category: #world  By Dhananjay Punekar  Date: 2018-05-28
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Foxconn to raise $4.3bn in China’s biggest IPO since three years

The USD 4.3 billion fund-raising round of Foxconn Industrial Internet (FII), a division of Foxconn Technology Group in China has attracted investments from three reputed internet giants including Baidu Inc., Alibaba Group, and Tencent Holdings from the country.  For the record, this round is one of biggest initial public offerings in China after 2015.

Analysts are of the view that the move will help Tencent & Alibaba expand their cloud computing business, while simultaneously helping all three firms in maximizing their operations across the automotive tech industry. The strategic move is also reportedly aimed at smart production, 5G technology, and cloud computing tools.   

Reportedly, each of these three big Chinese tech firms has received nearly 21.78 million stocks, thereby acquiring a major part of the ownership in the firm. As per some of the key officials of Foxconn Industrial Internet, around twenty investors in the region were allotted 590.8 million shares, approximately thirty percent of the total offering size. They have further announced that the stocks allotted to Tencent, Baidu, and Alibaba were worth USD 47 million each with a lock-in period of nearly 3 years. The firm also aims to sell 30% of its public share offering to investors in what may seem to be a not-so-common move with regards to mainland deals.

Foxconn Industrial Internet wants to issue nearly over 1.97 billion stocks of type A – that is around 10% of its enlarged capital. Experts believe that the FII will utilize the proceeds from the stock sale to fund nearly twenty ventures across eight fields, encompassing industrial internet, smart manufacturing tools, and data centers.

Experts claim that this IPO reflects the will of the Chinese entrepreneurs to attract tech giants towards the country for investments. As per Reuters, the IPO pricing displays 17 times the historical earnings of FII – quite lower than that of the evaluation cap of twenty-three times favored by the authorities of China.



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Dhananjay Punekar

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Dhananjay Punekar

Dhananjay Punekar presently develops content for a slew of portals, including Market Size Forecasters and Algosonline. A post graduate in mathematics and business administration, he worked in Infosys BPO Limited prior to switching his professional genre. As a content wr...

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