Gaming firm Razer prices IPO near top end
A huge response from retail investors has prompted Singaporean-led gaming tech company Razer to price its initial public offering (IPO) at the top end of the range it initially outlined.
Although institutional interest in the IPO seemed lukewarm, retail investors appear to be looking at the deal in a different way.
The Hong Kong public tranche was 289 times over-subscribed with 21 million people placing orders, local media reported. That has led Razer to price the shares at HK$3.88 (68 Singapore cents), Bloomberg reported yesterday, citing sources.
That is near the top of the range between HK$2.93 and HK$4 a share it cited during its investor roadshows.
The huge response compares with Tencent's China Literature, which was 623 times over-subscribed. Razer's IPO size is 1.06 billion shares.
Of this, 10 per cent was offered to the Hong Kong public. The other 90 per cent was offered through an international placement, targeting institutional investors and high-net-worth individuals.
Both tranches closed on Monday.
Mr Li Ka-shing, Hong Kong's richest man, is one of Razer's early backers.
Mr Ke Yan, an insight provider on Smartkarma, noted: "I think Hong Kong investors buy the Li Ka-shing story.
"To comprehend the enormous over-subscription ratio observed in this Hong Kong IPO, one should also understand that there is a subtle difference between Hong Kong and Singapore's public tranche.
"In Hong Kong, retail investors can use broker-facilitated leverage to subscribe to IPOs which is an important tool for hot deals like this. Even with such leverage facilities, retail investor might just get allocation of one lot (1,000 shares) in most cases."
Razer plans to commence trading on the Hong Kong bourse next Monday. - MARISSA LEE