China Resources New Energy attracts retail bids of $943 billion for the largest Shenzhen IPO

A filing on Tuesday showed that retail investors bid a total of?6.4 trillion yuan (?943.2 billion), with demand for the 'public tranche? exceeding 1,000 times what was initially offered.

Strong retail demand highlights the appetite for one China's biggest recent listings. The China Resources Power unit's IPO was priced at 10.11 yuan per share. This would allow it to raise as much as 24.5 billion yuan if the overallotment option were fully utilized.

According to LSEG data, as of last week, this would be Shenzhen’s largest IPO ever, surpassing Yihai's 13.9bn yuan listing for 2020.

This would be China's biggest?domestic? IPO since 2009, when the Beijing-Shanghai High-Speed Railway raised 30.07 billion yuan.

The filing on Tuesday showed that retail investors had placed valid bids of 636 billion shares. This is worth approximately 6.4 trillion yuan if the IPO price was used.

The IPO allocated half of the shares to?strategic buyers, 70% to institutional investors, and 30% to retail purchasers.

The clawback mechanism was activated by heavy retail demand, which reshuffled the allocation. This brought the retail tranche to 930.7 million shares or 67.95%, of the remaining shares after the strategic placement.

The filing revealed that after the reallocation the retail?tranche had been subscribed to 683.4.

The filing stated that the company and its underwriters conducted the share 'allocation draw' on Tuesday, and will publish the results on Wednesday. The filing didn't specify a date for the debut of trading.

(source: Reuters)