HONG KONG -- Chinese bottled-water company Nongfu Spring is seeking to raise up to 8.35 billion Hong Kong dollars ($1.08 billion) in the city's second-largest initial public offering this year.
Nongfu's plans come as new share offerings pick up pace in Hong Kong after a lull brought on by the coronavirus pandemic. The city, which has been the world's biggest equity-listing destination in seven of the past 11 years, has seen 70 IPO applications since the start of June, with Alibaba Group Holding affiliate Ant Group also filing its application for an offering.
Roughly $19 billion has been raised in Hong Kong, including secondary listings by U.S.-traded online retailer JD.com and game developer NetEase, so far this year. That puts HKEX in fourth place behind Nasdaq, the New York Stock Exchange and Shanghai's STAR Market, according to data compiled by Dealogic.
China Bohai Bank claims the largest offering in Hong Kong so far this year, raising HK$13.8 billion, but that is expected to be overtaken by Ant Group and others.
Nongfu is offering 388.2 million shares at a price range of HK$19.50 to HK$21.50, according to a prospectus filed with Hong Kong Exchanges & Clearing, the stock market operator. The IPO opened on Tuesday and will be priced on Friday, with the first day of trading scheduled for Sept. 8.
Its IPO already has the support of five cornerstone investors, who have agreed to buy shares worth $320 million of the offering, with the valuation based on the top end of the price range.
Fidelity International has committed to purchasing $100 million worth of shares, Coatue Management will put in $80 million, and GIC, the sovereign wealth fund of Singapore, plans to buy shares worth $70 million.
China Structural Reform Fund and Cct-Citic Agricultural Fund together will subscribe to shares equal to $50 million, while Japanese financial-services group Orix will join with $20 million.
Nongfu, founded in 1996, has been the largest packaged drinking water supplier in China since 2012, according to its prospectus, citing research by consulting firm Frost & Sullivan. The company also makes bottled tea and juices.
The company plans to use proceeds from the offering for brand building, purchasing equipment and building production facilities, among other things, the prospectus said.
China International Capital Corp. and Morgan Stanley are the joint sponsors of the IPO.