Chinese largest private Real estate developer, Evergrande is all set to make a debut in the stock markets. The Evergrande IPO is priced in the range of HK$3.50-HK$5.60 and if it is offered at the higher side of the price band, then the promoter of the issue will be worth almost 7.2 billion $ after the issue. His value is going to rise even further if he succeeds in listing the Evergrande IPO on the Hong Kong stock exchange, which is expected to be till the end of March 2008.
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Coming to valuations, the Evergrande IPO seems to be offered at a discount price, as the price band of HK$3.50-HK$5.60 is well below the value as compared to the assets the company has. Fifty percent of the money raised through the IPO book building process will be used to pay for the land which the company has already purchased on lease. This indicates a problem of funding though.
Credit Suisse, Goldman Sachs and Merrill Lynch have been jointly appointed the book-running lead managers for the Evergrande IPO issue.
| But its not easy for the Evergrande IPO to be listed. The Chinese government is strict to keep the real estate prices in check and hence the credit limit available to the real estate sector will be limited. Ultimately, this IPO may o may not even survive. Let’s see how things proceed with this IPO, but if it comes out, then it will be a major IPO in the history. | Table of Contents |
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