Tycoon effect expected to spur investor rush for Hidili shares

With local tycoons lining up to buy its shares and solid growth in the mainland coal industry, Hidili Industry International Development is expected to be this month's most popular initial public offering in Hong Kong.

The Sichuan-based coal and coking coal producer, which hopes to raise as much as HK$4.1 billion, kicked off its international roadshow last Monday. By the end of the week, it reportedly had received orders for 10 times more shares than on offer.

Buoyed by stellar economic growth and surging demand for coal to generate power and refine steel, Hidili is the latest mainland company to attract money from some of the city's super-rich. It brought in four tycoons as cornerstone investors, including Chinese Estates Holdings chairman Joseph Lau Luen-hung, Bank of East Asia chairman David Li Kwok-po, Henderson Land Development chairman Lee Shau-kee, and Kerry Group's Robert Kuok.

Each subscribed to US$20 million worth of shares, which have a lock-up period of six months.

Mr Lee has been particularly keen on pouring money into new mainland share offerings this year, investing in Fosun International, KWG Property Holding and China Molybdenum.

The Hidili issue was launched at an indicative price range of HK$5.05 to HK$6.65, but the company raised the upper limit to HK$6.83 given the reported oversubscription of the institutional tranche.

UBS is sole bookrunner and lead manager for the offering.