Kingsoft Cloud, the cloud services subsidiary of China-based enterprise software producer Kingsoft, priced its shares at $17 on Thursday to raise $510m in its initial public offering.
The company upsized its offering from 25 million American depositary shares (ADSs) – each representing 15 ordinary shares – to 30 million ADSs and has a market cap of more than $4.7bn. The company had set a price range of $16 to $18 a week ago.
Shares rose 27% on the first day of trading on the Nasdaq Global Select Market on Friday and are worth $25.40 as of the time of writing.
Founded in 2012, Kingsoft Cloud runs a cloud infrastructure business focused on enterprise cloud computing and artificial intelligence of things services.
Kingsoft and smartphone manufacturer Xiaomi had expressed an interest in purchasing $25m and $50m in the stock offering, respectively, while Carmignac Gestion was considering the purchase of $50m worth of shares, but Kingsoft Cloud did not provide an update on this.
Proceeds have been allocated to building out the company’s infrastructure, technology and product development, to driving international expansion efforts and to expanding its ecosystem as well as to supplementing working capital.
Kingsoft Cloud raised some $700m in funding ahead of the offering. It secured $1.8m from Xiaomi in 2012, before the corporate returned in 2015 for a $66.6m series B round also backed by Kingsoft and IDG Capital.
Kingsoft, IDG Capital and an affiliate of China Asset Management provided $60m in series C capital in February 2016.
Brokerage firm China Merchants Securities led a $50m series C-plus round in May 2016 before Kingsoft, Liyue Investment and China Minsheng supplied $300m in a series D round in 2017.
Kingsoft and FutureX Capital each invested a further $100m in funding in 2018.
Kingsoft’s 53.7% stake has been diluted to 46.8%, while Xiaomi’s shareholding has been reduced from 15.8% to 13.8% and FutureX’s stake has dropped from 5.7% to 5%.
JP Morgan Securities, UBS Securities, Credit Suisse Securities (USA) and China International Capital Corporation are acting as underwriters.
Their 30-day option to purchase additional shares has been increased from 3.75 million ADSs to 4.5 million ADSs and would, if exercised in full, boost proceeds to more than $586m.
