Chinese smartphone maker Transsion, which is dominating Africa with its Tecno brand, has raised nearly $400 million in an IPO on China’s hot new tech-focused stock market.
The Shenzhen-based company said in a stock market filing Wednesday that it sold 80 million shares for 35.15 yuan ($4.93) each, raising 2.81 billion yuan ($395 million).
The share sale pushes Transsion’s valuation to $3.95 billion and establishes the company as one of the biggest attractions on the Star Market, China’s answer to the Nasdaq.
The company said that its shares would begin trading “as soon as possible.”
Transsion which also makes Itel and Infinix phones doesn’t do business in China, despite being based there. But it controls a huge part of the smartphone market in Africa.
Its offering triggered a rush among investors. Only one in 20 online bidders were allocated shares, while only three in 1,000 offline bidders were successful.
The IPO is on track to be the second largest for the Star Market, a board on the Shanghai stock exchange that launched in July and is viewed as part of China’s bid for tech superpower status. The initiative was unveiled less than a year ago by President Xi Jinping.
Beijing hopes Star will help China’s tech companies tap into vast wealth held by local investors, and entice global leaders such as Alibaba (BABA) and Tencent (TCEHY) to return from stock markets in New York and Hong Kong.
Investors have been enthusiastic about the stocks on the board, hoping to find the next tech giant at an early stage.
So far 30 stocks have debuted on Star, many of them from the tech and manufacturing sectors. All the stocks have surged above their IPO prices, with an average gain of 160% by Wednesday’s market close, according to Wind, a Chinese financial data provider.
The top performer is Anji Microelectronics Technology, a Chinese chipmaker based in Shanghai. The company’s stock has gone up fivefold from its offer price.
China has encouraged its companies to become less dependent on foreign money and technology, a campaign that has intensified during the trade war with the United States and since the Trump administration blacklisted Huawei, a leading global smartphone maker and 5G network supplier.
Previous attempts by China to create a rival to Nasdaq in 2009 and 2013 failed because of a lack of quality listings and limited turnover in shares. Star may prove to be different.