Agricultural Bank of China's $19.2 Billion IPO Eclipses Previous Record

 |  Includes: CAF, CHIX, FEFN, FXI, GXC, PGJ
by: Renaissance Capital IPO Research

Despite recent headwinds in Asia and an all but stable market, Agricultural Bank of China [1288.HK][601288.CH] priced a record-breaking IPO this week in a dual Shanghai/Hong Kong offering.

Agri Bank sold 22.2 billion A-shares in mainland China priced at ¥2.68 (US$0.40) apiece; the top of the ¥2.52-¥2.68 (US$0.37-US$0.40) range, raising $8.8 billion in Shanghai. The company also offered 25.4 billion H-shares, which priced at HK$3.20 (US$0.41) apiece, above the midpoint of the HK$2.88-HK$3.48 (US$0.37-US$0.45) range, raising US$10.4 in the international portion of the offering. The combined offer sums to a record-breaking US$19.2 billion.

Ahead of China's ICBC Bank and Japan's NTT Mobile Communications (NYSE:DCM), China Agri now tops the list of the All Time Largest Global IPOs, pushing Visa's (NYSE:V) $17 billion March 2008 offering to number 4.

IPOs in the Asia Pacific have raised nearly $72 billion YTD, making up 67% of the $103 billion raised by initial public offerings across the globe so far this year. Until recently, Hong Kong has been a small piece of that issuance, but Agri's $10 billion Hong Kong portion, along with a slew of other offerings in HK - including recent IPOs by transportation management systems provider China ITS Holdings [1900.HK] and financial company Guotai Junan [1788.HK], has increased that share significantly. Also of note is the recently positive performance of HK Listed IPOs as measured by the FTSE Renaissance Hong Kong/China IPO Index, which has rebounded 9% from its YTD low on May 25 (vs. a 6% recovery by the Hang Seng over the same period).

Combined with the recent comeback of Hong Kong listed IPOs, Agricultural Bank's mega offering may encourage the many others waiting in the HK pipeline to come to market, and suggests an active 2010 for global IPOs.

Agricultural Bank of China's shares will list on both the Shanghai Stock Exchange and the HKEx on July 16th. China International Capital, CITIC Securities, China Galaxy Securities, and Guotai Junan Securities managed the Shanghai portion of the deal, while China International Capital, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and JP Morgan (NYSE:JPM) were the lead underwriters on the Hong Kong portion of the IPO.

Disclosure: None