The deal, which could value China's fifth-largest rural commercial bank by assets at some US$6.7 billion, is relying on cornerstone investors to take up 40% of the offering.
That is a signicant level but far below a record of nearly 80% set by China Development Bank Financial Leasing Co Ltd last year. High levels of cornerstone investment often indicate less confidence that a deal will meet with strong demand from institutional and retail investors.
Dependence on cornerstones by many Chinese firms going public comes at a time when China has made it mandatory for mainland cornerstone investors in Hong Kong IPOs to repatriate funds when they sell their shares, a rule likely to hit listings that rely heavily on them.
GRCB set the indicative range for the 1.58 billion shares on offer at HK$4.99-HK$5.27 each, according to a term sheet of the deal seen by Reuters. The shares would be equivalent to around 16.5% of the lender after the offering.
GRCB did not reply to a Reuters request for comment.
It secured commitments worth about US$431 million from three investors, including US$195.1 million each from a unit of HNA Group and from Aeon Life Insurance Company Ltd, which is controlled by billionaire Wang Jianlin's Dalian Wanda Group.
Investment firm International Merchants Holdings plans to buy US$40 million worth of shares.
The IPO had been due for a May 15 launch, but was delayed as some anchor and cornerstone investors were not ready at the time to sign onto the deal, said a person with direct knowledge of the plans without elaborating. The person declined to be identified as the details of the IPO were not public.
Cornerstones back many Asian listings, committing to buy large, guaranteed stakes and agreeing to a lock-up period of 6-12 months during which they will not sell their shares. Anchor investors have fewer restrictions on when they can sell the stock.
The deal would be the second by a rural commercial bank in Hong Kong in 2017, following the US$446 million listing by Jilin Jiutai Rural Commercial Bank Corp Ltd in January.
Jilin Jiutai stock is up 7.5% from its IPO price, lagging a 13% gain in the benchmark Hang Seng index.
Financial firms typically account for the bulk of new listings in the city, but have only comprised 27% of IPOs so far in 2017, compared with 60% last year.
Other lenders looking to go public this year include Zhongyuan Bank and Bank of Gansu, which plan to raise about US$1 billion and US$700 million respectively.
GRCB's IPO is set to be priced on June 13, with its debut on the Hong Kong stock exchange slated for June 20.
ABC International, CCB International, China International Capital Corp Ltd and China Merchants Securities were hired as sponsors for the IPO, GRCB said in its preliminary IPO prospectus. - Reuters