Qualcomm wants a stake in Xiaomi and is considering participating in the company’s initial public offering set to take place next month, Bloomberg reports, citing people familiar with the matter. Telecom giant China Mobile is understood to be working on a similar plan as well, though the size of both potential investments remains unclear. Qualcomm may see Xiaomi’s public market debut as an opportunity to generate some goodwill with China’s government in regards to its proposed NXP acquisition, though the original equipment manufacturer isn’t closely associated with Beijing, especially not compared to the likes of Huawei and ZTE.
Xiaomi is recently said to have placed its dual-listing strategy on hold over a number of regulatory problems and won’t be issuing any Chinese depositary receipts for the time being. Instead, its IPO should consist solely of a Hong Kong Stock Exchange listing, lowering its funding target to some $6.1 billion. The company is still expected to turn to CDRs in the near future, after China’s regulators put the legal framework necessary for doing so into place. Following its second public market debut in mainland China, Xiaomi should raise some $10 billion in total at a valuation of up to $80 billion, according to numerous reports and the OEM’s previous regulatory filings. The move should lead to the largest technology IPO since Alibaba went public in 2014 and mark a major milestone in Xiaomi’s eight-year history as the company makes a more concentrated global push.
Xiaomi is presently close to overtaking Samsung as the largest smartphone vendor in India, the world’s fastest-growing handset market, with the firm also recently expanding its presence to Spain, Italy, Poland, and a number of other European countries. While its long-term business strategy isn’t expected to change immediately following its IPO, some investors remain skeptical how Xiaomi’s growth-above-everything approach will sit with shareholders hungry for returns in the long term. The OEM’s IPO is expected to take place in the first half of July.
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