Wealth Management Company Lufax Seeks $2.36 Billion in U.S. IPO

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by Godfrey Benjamin · 3 min read
Wealth Management Company Lufax Seeks $2.36 Billion in U.S. IPO
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Shanghai-based wealth management company Lufax is looking to raise up to $2.36 billion in its proposed Initial Public Offering for eventual listing on the New York Stock Exchange.

Per the report from CNBC, Lufax noted that it would be issuing out 175,000,000 million American Depositary Shares (ADS) and that it would be giving out the shares for a price in the range of $11.50 to $13.50 per share.

Quantitative estimation of the proposed earnings should all the American Depositary Shares be bought will see the Lufax Initial Public Offering (IPO) raise about US$2.01 billion if the shares are sold for $11.5 per share and about $2.36 billion should they go out for $13.5 per share. While market conditions could make the earning dabble in between the two extremes or beyond.

The golden appeal of a U.S. initial public offering has lost its luster owing to the China-U.S. economic tension that has impacted the business operations of some Chinese business outfit to date. Amongst the biggest hit firms include Huawei Technologies Co Ltd, Tencent Holdings Ltd amongst others. In the case of Huawei, the US has placed a trade ban on the company’s chip suppliers, a move that has significantly impacted the company’s phone manufacturing operations. ByteDance is another Chinese firm that has been strained by the U.S.-China tensions in recent times as it battles the ban of TikTok in the U.S.

Lufax Proceeding With IPO, A Move Didi Is Unwilling To Risk

The intention of Lufax to proceed with its IPO plans despite the obvious challenges is a move that the Chinese ride-hailing giant Didi is unwilling to make as reported by Coinspeaker. Didi initially has plans to get listed in U.S. public exchanges after an IPO and has now rescinded its decision and currently considering pitching a tent with the Hong Kong Stock Exchange. As Coinspeaker reported, the initial public offering plans by the Chinese ride-hailing company Didi has commenced with consultations being made with investment banking outfits.

Nonetheless, Lufax with backing from the Ping An Group of China will be proceeding with the IPO and hopes to get listed under the ticker symbol ‘LU’. Bloomberg reported that the company expects the price to be offered on the 29th of October and the shares to begin trading on the 30th on the floor of the New York Stock Exchange. The underwriters for the Lufax IPO include  Goldman Sachs Group Inc (NYSE: GS), Bank of America Corp (NYSE: BAC), UBS Group AG (SWX: UBSG), HSBC Holdings Plc (LON: HSBA), and China PA Securities Co.

While Lufax refuses to model Didi, it hopes to see the successes of fellow Chinese companies who got listed in the United States this year including Xpeng Inc-ADR (NYSE: XPEV) and Li Auto Inc (NASDAQ: LI).

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