Meituan-Dianping launches IPO, becomes fourth largest company in China

China’s online food delivery Meituan-Dianping launched IPO on the Hong Kong Stock Exchange on Thursday. The company raised $4.2 billion from its IPO, pricing its shares near the top of its target range.

The company’s shares closed at HK$ 72.65, 5.29 per cent above the initial offering price, which raised its market valuation to $50.9 billion. The increased valuation has also made Meituan the fourth largest company in the region after Baidu, Alibaba and Tencent.

Early this month, it was reported that Meituan-Dianping is planning to list the company on the Hong Kong Stock Exchange this September. The report added that it plans to raise up to US$4.3 billion at a valuation up to US$55 billion; and the company’s share will be in a range between HK$60 to HK$72 per share.

Launched in 2010, the company has received a total funding of $8.3 billion, generates an estimated $5.4 billion worth of annual revenue. Tencent is one the biggest investors in the company.

Experts say that the IPO launch will further intensify the fight in the foodtech segment between Meituan-Dianping and Alibaba-owned Ele.Me.

According to media reports, Chinese e-commerce giant Alibaba is all set to merge food delivery platform Ele.me and food and lifestyle firm Koubei to raise next round of investment to fight its rival Tencent-backed Meituan Dianping.

The largest Chinese Group is working on fundraising and planning to raise around $3-5 billion for the combined entity.

This is the second biggest IPO launch on the Hong Kong exchange after Xiaomi’s debut in July this year. The Chinese phone maker raised $4.7 billion at a valuation of about $54 billion. The numbers were far less for Xiaomi, which was expecting to raise around $10 billion in the initial public offering that could value the business as high as $100 billion.

Meanwhile, Xioami is planning to IPO’s money into the Indian market. It plans to invest in Internet services, especially IoT space, and also gets into the premium smartphone segment in the country.

The development was first reported by Technode.