In March, The International Federation of Robotics Hong Kong explained that Xiaomi Company (Chinese smartphone) is exploring the possibility of selling shares in the domestic market. In the Xiaomi IPO test phase in the domestic stock market and is only available for domestic. Although the Chinese Depositary Receipts (CDR) may make xiaomi available in overseas stock markets, it is still unreleased.
One trader who used to buy shares in the IPO explained that “Xiaomi IPO is only available in China”. This is in accordance with the fact that makes xiaomi can not be sold in the stock market abroad. This can be an important precedent for Chinese technology companies that are outside of China.
According to people familiar with the discussions, Xiaomi’s international IPO can rate the company up to US $ 100 billion, and discuss an idea of adding A-share lists to its global float. But the reality is that xiaomi is still being tested for domestic. It is not possible xiaomi will compete with other chinese products on the stock market.
Xiaomi IPO test phase in the domestic stock market
Many assumptions arise about xiaomi. One of the domestic test stages of xiaomi can be the first step towards the international stock market. The initial step of such an xiaomi will inevitably require changes to the current rules. In the Xiaomi company structure many groups are domiciled abroad. For the Phase Xiaomi IPO test in the domestic stock market requires that they are subject to current regulations. Xiaomi’s company is in discussions regarding the Regulation with China Securities Regulation Commission to get out of the problem.
The Chinese Regulation Regulations currently do not allow overseas companies to sell their shares domestically. So many Chinese companies abroad will be pulled into the country. the regulation underscores the desire of the authorities to withdraw some overseas companies abroad to China.
One option is for the Xiaomi company to loosen the current organizational structure and transform the company into a domestic company domiciled in China. This could have made the IPO for Xiaomi will be delayed until the end of the year.
Chinese Depositary Receipts (CDR) Xiaomi international IPO Solutions.
The foreign traders are beginning to expect the sale of xiaomi stocks available to them. When is xiaomi stock available for us to buy? especially for those of us who live outside China. Xiaomi is not silent. they started looking for solutions selling stocks abroad. Possible solution is through the sale of Chinese Depositary Receipts (CDR). CDR is a new tool that is being studied by regulators in China.
Chinese Depositary Receipts (CDR) Allows Xiaomi companies to offer their shares in foreign exchange. The Company may transfer a certain amount of its shares to an intermediary. Possible intermediaries like the Bank. The intermediary will buy some Xiaomi shares then sell them abroad. at the time of the transaction, the company will notify the depository bank abroad to issue a receipt for the stock in the local market.
When this happens, Xiaomi may get more offers called “Red Chip” overseas Chinese listed companies and Hong Kong. Many who expressed interest in the A-Share list when Shanghai launched the international council in the near future. China’s main legislature may also decide to grant a one-time approval allowing Xiaomi to sell shares under the current structure.
“For a list at home, Xiaomi will need the blessing of all related regulators, and it’s challenging”