Agricultural Bank of China's initial public offering is likely to raise much less than the $30bn record-setting total it had hoped to get when it sells shares in Hong Kong and Shanghai as early as next month.
Analysts and bankers close to the deal said that judging by investor appetite, the current state of the market, and details in the IPO prospectus released late on Friday, Agricultural Bank was more likely to raise a little over $20bn. At that level the IPO would not be the world's largest. It had been expected to eclipse the current IPO record set by Industrial and Commercial Bank of China, which raised $22bn in 2006.
China's stock market has dropped about 20 per cent since mid-April on general worries about the country's economy and concern over a huge flood of bank fundraisings hitting the market at the same time. Chinese lenders been rushing to shore up their balance sheets following an unprecedented lending spree last year.