If the bank fully exercises an over-allotment option of up to 776 million shares, the fundraising size may reach as much as RMB32.7 billion, surpassing Guotai Junan Securities Co’s RMB30 billion offering in 2015. In doing so it would become the largest A-share listing since Agricultural Bank of China’s RMB68.5 billion offering in 2010, according to data compiled by Bloomberg.
The country’s banks are boosting capital at a record pace, mostly through debt sales, to beef up financial strength as they grapple with rising bad debt. Policymakers have also called on lenders to help revive its economic growth and increase loans to China’s cash-starved non-state sector, which would see them take on more risk. China’s equity financing market is heading to the first increase in volume this year since 2016.
Postal Bank has more than 40,000 outlets nationwide and more than 550 million retail customers. The stock has gained 25% in Hong Kong this year. The A-share offer price represents a premium of about 19% to Nov 6’s close of HK$5.16 in Hong Kong. The stock rose 1.2% that day.
Subscription was postponed to Nov 28, from the original date of Nov 7. China requires companies that price their shares above industry average to file risk warnings to investors for three weeks.
