Jupai Holdings, a China-based wealth management service backed by online media company Sina, will raise $53m when it floats on the New York Stock Exchange later today.
The company priced its initial public offering at $10 per share yesterday. The price is at the bottom of the $10 to $12 range it initally set, but the 5.3 million shares it will issue is greater than the 4.4 million figure previously touted.
Jupai provides a wealth management service to high-net-worth individuals in China that concentrates on wealth management products and advisory services.
Approximately $12.6m of the proceeds will go to expanding Jupai’s coverage network by opening new client centres and hiring more product advisors and client managers. An additional $12.6m will support investments in office buildings, infrastructure and an upgraded IT system.
Jupai’s largest shareholder will remain real estate services provider E-House, which boosted its share in the company from 33% to 41.4% in April this year through the transfer of its asset management business. Its share will be diluted to 31.4% in the offering.
A Hong Kong-based subsidiary of Sina holds an 11% stake in Jupai that will be diluted to 7.3% post-IPO. Other notable shareholders post-offering will be investment vehicles Juda Holding (14.2%) and Juda Capital (4.7%).
Credit Suisse Securities and China Renaissance Securities are serving as joint bookrunners for the offering. They have the 30-day option to acquire almost 880,000 additional shares, which would bring the total raised in the IPO to nearly $61.8m.