Chinese bottled water firm Nongfu Spring raises more than $1bn in IPO

Nongfu Spring, a bottled water company in China, has reportedly raised more than $1bn through its initial public offering (IPO) in Hong Kong.

With this success in IPO, the Nongfu Spring founder Zhong Shanshan has become the third-richest man in China.

More than 700,000 small independent investors committed HKD670.8bn ($86bn) for the retail portion of the company’s share offering.

Initially, Nongfu shares were priced at HKD21.50 ($2.77) and closed at HKD33.1 ($4.12), said to be more than 50% high than its initial issue price.

In the deal, which is led by fund managers Fidelity, hedge fund Coatue and Singapore wealth fund GIC, five cornerstone investors took stock. Fidelity and GIC bought approximately 30% of Nongfu’s offering.

Established in 1996 by Shanshan, Nongfu Spring offers packaged drinks such as tea, coffee and fruit juices, in addition to its bottled water.

Shanshan currently holds 84% stake in the brand’s share capital and also owns a 75% stake in the Chinese vaccine and test kit maker Beijing Wantai Pharmacy.

In the IPO deal, more than 388 million shares were sold, reported to be one of the biggest trades in this year in Hong Kong.

Additionally, Nongfu was the third most traded company on Hong Kong stock exchange after service apps provider Meituan and Tencent.

Investors have purchased stocks in the company anticipating that it will tap the increasing demand for healthy beverages in the country.