ZhongAn Online Property and Casualty Insurance, China's first Internet-only insurer, has covered by multiple times the institutional tranche of its initial public offering of up to $1.5 billion, reported Reuters citing people familiar with the deal.
Expectations that the stock could be added to the “Stock Connect” scheme in October is also boosting retail demand for ZhongAn, added one of the people, none of whom could be named because details of the IPO demand are not yet public.
Adding ZhongAn to the Stock Connect scheme would allow millions of retail investors in China to buy the stock, though timing for a potential approval is still uncertain, the person said.
On 18 September, the first day of orders, retail investors took out more than $6.7 billion of loans to buy the shares, subscribing for 87 times the number available to them, the Hong Kong Economic Times reported.
In its IPO, the Shanghai-based company is offering 199.3 million new shares at HK$53.70 to HK$59.70 apiece. Japan’s SoftBank Group Corp.agreed to purchase 71.9 million shares, worth as much as US$550 million, as the sole cornerstone investor in the offering.
The company plans to use proceeds from the offering to strength its capital base to support business growth . ZhongAn aims to price the offering today and begin trading on 28 September.
Ant Financial, the online-payments provider backed by Chinese billionaire Jack Ma, is ZhongAn’s biggest shareholder with a 16% stake, according to a prospectus filed with the Hong Kong exchange. Ping An Insurance Group and Chinese Internet company Tencent Holdings Ltd each hold 12% of ZhongAn, the filing shows.