Alibaba.com raises $1.49 billion in HongKong IPO

China''s biggest e-commerce firm Alibaba.com has raised $1.49 billion, as it priced its Hong Kong initial public offering (IPO) at HK$13.50 each, at the very top of the indicated range of HK$12.00 to HK$13.50 on massive demand.

Even though Alibaba.com’s valuation is seen as high at 106.3 times forecast 2007 earnings, investors flocked to the leading IPO to tap a growing Chinese e-commerce market. The company sold 858.9 million shares, or 17 per cent of its enlarged share capital. The top-end pricing gives the company a market value of about US$8.7 billion.

By comparison, local competitor Baidu.com trades at 142 times its 2007 forecast earnings. Google trades at 43 times forecast 2007 earnings and eBay at 24 times. Trade media company Global Sources trades at 49 times, while Hong Kong-listed Tencent Holdings trades at 74 times prospective earnings. The deal attracted more than $180 billion worth of orders from institutional investors.

The IPO also generated orders for more than HK$450 billion (US$57.7 billion) worth of shares from retail investors, making it the most popular IPO ever in Hong Kong. This will trigger a clawback mechanism and raise the retail portion to 25 per cent from 15 per cent of the total offering.