Xiaomi Corp. has initiated a share sale aiming to raise up to $5.3 billion, capitalizing on a rise in its stock price to gather funds for expanding its electric-vehicle business. The Beijing-based company is offering 750 million shares at a price range of HK$52.80 to HK$54.60 each, which represents a discount of 4.2% to 7.4% compared to the stock’s previous closing price in Hong Kong. Investor demand matched the offering size by Monday evening, as reported by unnamed sources familiar with the matter.

This share sale follows the recent $5.6 billion fundraising by EV giant BYD Co, amidst a flourishing year for share sales in Hong Kong. Hong Kong's benchmark stock index has shown significant growth this year, kindling optimism for an increase in deals in the region’s financial market.

Xiaomi is aggressively investing in its emerging EV sector to fuel its growth, having recently raised its 2025 EV delivery target after achieving its fastest revenue growth since 2021. The company is expanding its proposed second electric car factory in Beijing to scale up production. Hong Kong’s stock rally, with the Hang Seng Index rising by almost 20% this year, has attracted renewed interest from global investors, leading to expectations of more companies entering the equity markets this year.

With Xiaomi's shares having tripled since August and ranking as one of Hong Kong's top-performing and highly valued tech stocks, the company has managed to replicate its smartphone success in China's competitive EV market. The fundraising could be advantageous in the long term, supporting potential deleveraging, artificial intelligence research and development, and expanding EV capacity, as noted by Citigroup Inc. analyst Kyna Wong. However, in the short term, the share sale might exert pressure on the stock due to dilution.