Tea shop chain Sichuan Baicha Baidao shares slump 23% in Hong Kong debut (updated)

Sichuan Baicha Baidao Industrial Co

23/04/2024 02:56

(Updates share price in first paragraph and deal detail from
fourth paragraph)
    By Scott Murdoch and Donny Kwok
       HONG KONG, April 23 (Reuters) - Shares in Chinese tea
shop chain Sichuan Baicha Baidao Industrial  2555.HK  fell more
than 20% on Tuesday in its Hong Kong trading debut following a
$330 million initial public offering (IPO).
    The shares were sold at HK$17.50 ($2.23) each in the IPO,
which is the largest in Hong Kong so far in 2024. 
    Baicha Baidao shares opened down 10.1% and fell by as much
as nearly 23% to HK$13.50 each in early trade.
    The shares had been offered to investors at a fixed price of
HK$17.50 rather than in a range that would have given the
underwriters the ability to set a final price after gauging
demand.
    Baicha Baidao's IPO attracted tepid interest from investors.
    Hong Kong retail investors did not take up the full amount
of shares on offer for them, according to the company's
regulatory filings.
    The retail tranche was only 0.5 times covered, which mean
7.44 million shares were reallocated to institutional investors.
    The institutional tranche was 1.1 times covered, which is
considered weak, especially compared to Hong Kong's IPO boom
times in 2020 and 2021 when deals were hundreds of times
covered.
    ($1 = 7.8357 Hong Kong dollars)

 (Reporting by Scott Murdoch in Sydney and Donny Kwok in Hong
Kong; Editing by Christian Schmollinger and Jamie Freed)
 ((Scott.Murdoch@thomsonreuters.com;))