China Shengmu Organic Milk launched a HK$1.1 billion to HK$1.3 billion $139 million to $169 million IPO on Monday, a far cry from original ambitions to source up to US$800 million.
Timing is far from optimal given a souring of investor sentiment towards the milk sector in recent months. As a result, Shengmu has shaved the amount of equity it plans to sell to the regulatory bare minimum - 7% of its enlarged share capital, pre-greenshoe.
Nevertheless, it has still opted to plough ahead with a small-scale deal in order to raise money to fund its expansion plans to build a further six dairies...
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