AN Internet and industrial-focused unit of Taiwanese electronics manufacturer Foxconn plans to sell 30 percent of its public share offering in Shanghai to a group of cornerstone-type investors, its prospectus showed, a rare move in China listings.

Foxconn Industrial Internet is yet to finalize the size of the initial public offering (IPO), but it plans to use the proceeds to finance investments totalling 27.3 billion yuan (US$4.3 billion) on areas including cloud computing, data center and 5G related projects, according to the prospectus.

It aims to issue up to 1.97 billion A shares, or 10 percent of its enlarged capital, at a price to be determined.

Unlike most Chinese listings which only have two tranches of investors — institutional and retail — the firm’s float will also bring in several strategic investors that will be locked up for at least 12 months.

Such investors are commonly known as cornerstones and are a long-established practice in several Asian markets including Hong Kong. They have increasingly been used to bolster demand for large deals.

A total of 72 percent of the US$8.1 billion raised by Postal Savings Bank of China in 2016 in Hong Kong was taken up by cornerstones.

Regulators do not officially call them conerstone investors, but sources close to the Foxconn deal said they are similar to conerstones.

Foxconn unit’s IPO, which would be the largest domestic listing since China’s stock market crash in mid-2015, comes at a time when China steps up its efforts to encourage “new economy” companies to list in Shanghai and Shenzhen.

(SD-Agencies)