A company with unglamorous roots is on track to make the biggest IPO of the year.
The Postal Savings Bank of China (PSBC), one of the largest consumer banks in China, will issue 12.1 billion new shares at HK$4.76 each on the Hong Kong Stock exchange, raising $7.4 billion upon listing.
That will make PSBC’s listing the largest IPO of the year—nearly double the size of Denmark’s Dong Energy, which listed in June.
It will also be the largest since Alibaba raised $26 billion on the New York Stock Exchange in November 2014.
…and the fifth-largest listing of a Chinese state owned bank.
PSBC gets its namesake from its progenitor—China’s state postal service. For decades, China’s village postal outlets served as makeshift consumer banks (paywall) for consumers to store their savings in. The postal service officially spun out its banking unit to establish PSBC in 2007.
PSBC is now the largest consumer retail bank in China when measured by outlets, with over 40,000 (pdf, pg 1) brick-and-mortar storefronts across the country and 505 million customers, about one third of China’s population.
It is also getting some help in the IPO from Beijing, in the form of Chinese state-run companies that are putting 75% of the funding as “cornerstone investors,” as the New York Times points out (paywall). While such investors are common in Hong Kong’s listings, their investment in PSBC is far higher than this year’s average of about 46%.