CATL Plans to Raise Minimum $4 Billion Through Hong Kong IPO

Chinese battery maker CATL seeks to secure a minimum of HK$31.01 billion ($3.99 billion) through its Hong Kong listing, as stated in its prospectus submitted on Monday, marking the largest global listing to date in 2025. The battery manufacturer for electric vehicles is offering 117.9 million shares at a highest price of HK$263 each, as per documents submitted to the Hong Kong Stock Exchange. The deal's value might rise to approximately $5.3 billion if an offer size adjustment and a so-called greenshoe option are utilised. Shares of CATL in Shenzhen increased by 3.6 per cent on Monday following the launch of the Hong Kong deal, hitting a six-week peak. The increase surpassed a 0.9 per cent rise in China’s blue-chip CSI300 index. CATL's $4 billion raise indicates that this listing is the largest globally this year, as per Dealogic data, surpassing JX Advanced Metal's $3 billion IPO in Tokyo back in March.

In Hong Kong, the stock offering will be the biggest since Midea Group secured $4.6 billion last year. Over 20 primary investors, spearheaded by Sinopec and the Kuwait Investment Authority, have signed up to purchase approximately $2.62 billion in CATL shares, according to the prospectus. The order book for the institutional portion of 109.1 million shares has already been fulfilled due to investor demand, as per two sources familiar with the situation. The sources could not be identified, talking about details that had not been disclosed yet. CATL did not promptly reply to a request for feedback regarding the demand. The offer size adjustment feature allows for an increase of the number of shares by as much as 17.7 million shares, potentially generating an extra HK$4.65 billion ($598.00 million). A greenshoe option exists to sell an additional 17.7 million shares.

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The filings indicated that the shares are expected to be priced between Tuesday and Friday, with the final price to be revealed on or before May 19. The prospectus indicated that 8.8 million shares will be offered for bidding by retail investors in Hong Kong. The firm announced that nearly 90 per cent of the funds generated, approximately HK$27.6 billion, will be allocated to building its proposed factory in Hungary, which is part of its strategy to produce batteries in Europe for car manufacturers like BMW, Stellantis, and Volkswagen. The initial stage of the factory, in which it is investing 2.7 billion euros ($3.03 billion), is expected to begin battery production this year. The goal is to start building the second phase later this year. CATL's shares in Hong Kong will be offered at a slight discount compared to the Shenzhen stock's closing price on Friday, if priced at HK$263 each, with trading set to commence on May 20. The prospectus indicated that CATL received a waiver from the Hong Kong Stock Exchange to avoid disclosing a minimum price for the shares to prevent affecting the trading of its stock listed in Shenzhen.

According to the filings, U.S. onshore investors cannot purchase CATL shares in the Hong Kong arrangement; however, numerous funds have offshore operations that can participate. In January, the company was added to a U.S. Defence Department list of Chinese firms that it claims collaborate with China's military. CATL mentioned in its prospectus that it was collaborating with the U.S. Department to resolve the 'incorrect designation'. "It does not prevent us from engaging in business with entities besides a limited number of U.S. governmental authorities, and therefore is anticipated to have no significant negative effect on our business," it stated. CATL's book building occurs while the U.S. and China celebrated productive discussions in Geneva over the weekend aimed at reducing their trade conflict, but the 145 per cent tariff imposed by Washington on Chinese products and Beijing's 125 per cent tariff on American products are still enforced. "Tariff regulations have been quickly changing." At present, we are unable to precisely evaluate the possible effects of these policies on our operations, and we will keep a close eye on the relevant circumstances," stated CATL's prospectus.