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SHANGHAI Feb 2 (Reuters) - Ping An Insurance (Group) Co. (2318.HK), China's No. 2 life insurer, will kick off what is expected to China's second biggest domestic IPO on Friday, which analysts estimate will raise at least US$3.9 billion.
Ping An, 19.9 percent-owned by HSBC (HSBA.L) (0005.HK), will start book building and investor roadshows on Friday, selling up to 1.15 billion domestic A shares for a listing on the Shanghai Stock Exchange expected around the start of March, it said in the statement published in China's major financial newspapers.
The Shanghai offer, at its maximum size, would account for 15.66 percent of Ping An's expanded capital of 7.345 billion outstanding shares. The company has already listed in Hong Kong.
Ping An plans to sell up to 345 million A shares to strategic investors with a lock-up period of 12 months, accounting for 30 percent of the Shanghai offer, it said.
A total of 287.5 million shares, or 25 percent of the offer, will be open to subscription of ordinary institutional investors, with a lock-up period of three months, while the remaining 517.5 million shares, or 45 percent, will be sold to retail investors.
After the book building, Ping An plans to announce a price range on Feb. 9, it said. Retail subscription will start on Feb. 12 and a final price will be made public on Feb. 14, it said.
The company will organised a series of roadshows in Beijing, Shanghai, Shenzhen and Guangzhou on Friday and next week.
Based on the closing price of Ping An's Hong Kong-listed shares at HK$37.65 on Thursday, the offer could raise as much as US$5.55 billion, but the actual value of proceeds could be less, as A shares have been usually offered at a discount to their Hong Kong equivalents.
Still, analysts have said Ping An will easily raise more than 30 billion yuan (US$3.9 billion), exceeding larger rival China Life's (601628.SS)(2628.HK) $3.63 billion Shanghai offer in December. Some estimate it could raise over 40 billion yuan.
Ping An's Hong Kong shares have more than doubled in value in the past 52 weeks as investors eye the insurance sector's booming growth as Beijing dismantles a cradle-to-grave welfare system.
China's domestic IPO record was set by the Industrial & Commercial Bank of China (601398.SS)(1398.HK) last October, which raised $6 billion.
More major Chinese companies, some of them already listed in Hong Kong, are tapping Shanghai's surging stock market. Its main index .SSEC soared 130 percent last year on a series of structural reforms that boosted investor confidence.
China's Industrial Bank will be listed in Shanghai on Monday after raising $2.1 billion in a Shanghai IPO, which drew 1.16 trillion yuan ($149 billion) in subscriptions from retail and institutional investors, a record for a domestic Chinese IPO.
China's Bank of Communications (3328.HK), a partner of HSBC, aims to raise about $2.6 billion through a listing in Shanghai in March, a source familiar with the plan has told Reuters.
Ping An said it would use the proceeds to expand its capital base and "other purposes approved by regulators".
Goldman Sachs Gaohua Securities Co., Galaxy Securities and CITIC Securities will be the lead underwriters. ($1 = 7.77 Yuan)