Warren Buffett-backed Chinese carmaker BYD Co Ltd will raise a less-than-expected 1.42 billion yuan ($219 million) in its initial public offering in Shenzhen, weighed down by weak investor sentiment and worries over its poor performance.
BYD had priced the IPO at 18 yuan a share, it said in a statement to the Shenzhen Stock Exchange on Sunday. The company had initially aimed to raise 2.19 billion yuan from the share sale, it said.
At 18 yuan a share, the IPO valued BYD at 15.9 times consensus 2011 earnings forecasts and marked only a marginal 0.8 percent premium to the company's Hong Kong-listed shares.
BYD's Hong Kong-listed shares were last traded at HK$21.50 a share.
Despite the modest deal size, the listing of BYD on the Shenzhen Stock Exchange was closely followed in China because local fund managers would finally have a chance to participate in the carmaker that Buffett invested in 2008.
Other mainland IPO hopefuls, such as New China Life, in which Swiss insurer Zurich Financial Services AG owns a 15 percent stake, and Citigroup-controlled Guangdong Development Bank as well as several Hong Kong-listed Chinese automakers are also looking to the deal for guidance on market demand.
BYD was selling up to 79 million shares in the IPO and proceeds from the sale will be used to fund its lithium ion project, add to research and development and expand its product range, the IPO prospectus said.
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