SMARTPHONE maker Xiaomi Corp. has lined up US$548 million from seven cornerstone investors, including U.S. chipmaker Qualcomm Inc., for its Hong Kong initial public offering (IPO) of up to US$6.1 billion, according to a term sheet.

Xiaomi, which also makes Internet-connected devices, has set a price range of HK$17 (US$2.17) to HK$22 each for its listing in the Asian financial hub, one of the biggest tech floats globally in recent years.

Other cornerstone investors include Shenzhen-based express delivery company SF Express, telecom service provider China Mobile Ltd., State-backed investment firm CICFH Entertainment and conglomerate China Merchants Group Ltd.

The seven will take a combined 10 percent of the shares being offered, and the company opened the book to intuitional investors Thursday, according to the term sheet.

The IPO values the Beijing-based, Cayman-domiciled company at US$54.3 billion, or US$70.3 billion after a 15 percent “greenshoe” or over-allotment option, which can be sold if there is demand. If the greenshoe is exercised, Xiaomi’s free float will be 9.99 percent of its enlarged share capital.

Xiaomi is selling about 2.18 billion shares in the IPO, 65 percent of which are primary, according to the term sheet. The selling shareholders are early investor Morningside, a Chinese venture capital firm, and Xiaomi managers.

The smartphone maker is also set to hand Hong Kong’s equity bankers one of the biggest paydays in recent years.

According to a preliminary offering document, Xiaomi is looking to pay an underwriting commission of 1 percent and an incentive fee of up to 0.25 percent. That means 23 banks on the IPO would share a total fee of about US$76 million, if Xiaomi prices at the top of its range.

(SD-Agencies)