* Shares go limit-up in first moments of trade
* FII becomes biggest China-listed tech co
* Listing may help parent reduce risk - analyst (Recasts with milestone, adds quote, context)
By John Ruwitch and Samuel Shen
SHANGHAI, June 8 (Reuters) - Foxconn Industrial Internet Co Ltd (FII), a unit of the world’s largest contract manufacturer, became China’s biggest domestically listed tech company by market cap on Friday as its shares soared a maximum 44 percent on debut.
The company, which makes electronic devices, cloud service equipment and industrial robots, raised more than $4 billion in China’s biggest IPO since 2015, highlighting Beijing’s resolve to lure major tech listings away from Hong Kong and New York and use capital markets to fortify the domestic tech sector.
FII hit the daily limit of 44 percent within seconds of trade, helped buy government caps on IPO valuations and mainland China investor enthusiasm for new issues.
The jump triggered a half-hour suspension and pushed FII’s market capitalisation to about 390.5 billion yuan ($61 billion), dethroning Hangzhou Hikvision Digital Technology as the biggest tech company listed in China.
The listing is viewed as part of efforts by Foxconn, formally known as Hon Hai Precision Industry Co, to wean itself off its heavy reliance on manufacturing smartphones for Apple Inc and to diversify into new areas.
“Right now you can sense Foxconn wants to reduce its customer concentration risk,” said James Wei, analyst at Yuanta Investment Consultancy in Hong Kong.
“FII does mainly telecommunication components and cloud equipment. This works well with China’s central government’s policy ... So listing A-shares works in concert with the overall environment to gain from its influence.”
Units of Chinese tech giants Alibaba Group Holding Ltd , Baidu Inc and Tencent were among the 20 cornerstone investors who took a combined 30 percent of the FII offering.
The three tech giants took roughly a combined 3 percent stake and agreed to a lock-up period of 36 months. Most of the other cornerstone investors can sell half of their stake after 12 months and the remainder after 18 months.
The use of the cornerstone investors is a new development in recent mainland China listings. But it is one that is expected to be seen again as China woos tech giants such as Alibaba and Xiaomi Corp to sell China Depositary Receipts in secondary IPOs, amid worries that the size of the deals could overwhelm mainland markets.
The FII debut comes a day after regulators published rules governing the issuance of China Depository Receipts (CDRs) - an instrument that allows secondary listings by overseas-listed Chinese firms such as Alibaba and Baidu.
China’s Ministry of Industry and Information Technology (MIIT) also on Thursday released a three-year action plan for “smart manufacturing”, as Beijing accelerates the integration of traditional manufacturing with digital technologies.
David Dai, general manager of Shanghai Wisdom Investment Co Ltd, said that rising U.S. antagonism against China – highlighted by the $1 billion fine slapped on telecommunications equipment maker ZTE - was prompting China to step up the use of capital markets to bolster its tech sector.
“The government is making well-rounded efforts to attract the listings of tech giants, and change the structure of a capital market dominated by traditional industries such as real estate. Rising tension with the U.S. will accelerate such efforts,” Dai said.
FII counts Apple, Cisco, Dell, Huawei and Lenovo among its clients. ($1 = 6.4007 Chinese yuan renminbi) (Reporting by John Ruwitch, Samuel Shen and Liu Luoyan in SHANGHAI and Jessica Macy Yu in TAIPEI Editing by Miral Fahmy and Stephen Coates)