Chongqing Water raises $511 million to quench its capital thirst

Chongqing Water Group has raised Rmb3.49 billion $511 million from a Shanghai initial public offering after fixing the price at the top end of an indicated range that was set lower than average to stimulate investor appetite.

The company sold 500 million new A-shares, or 11.6% of its enlarged share capital, at Rmb6.98 apiece. The final price marked the top end of an offering range that started at Rmb6.48, and translated into a 2009 price-to-earnings ratio of 34.9 times, the company said in a statement to the Shanghai Stock Exchange.

The valuation is below the average historical PE ratio of around 45 to 50 times for water supply and environment protection-related companies that have...