NVC Lighting raises $198 million from Hong Kong IPO

NVC Lighting Holdings has brought a dim light of hope to the otherwise fairly gloomy market for initial public offerings. The deal sailed through the Hong Kong IPO market and received enough interest to trigger a clawback that increased the allotment to retail investors to 30% from 10%. The institutional portion was multiple-times covered.

That makes this deal something of a hit, especially since it was in the market at a time when several major IPOs were either cancelled or postponed due to volatile conditions and rising risk awareness.

The company, which produces and sells lighting products in China and is part owned by Goldman Sachs, raised HK$1.53 billion ($198 million) after fixing the price at HK$2.10 per share. The final price is close to the low end of the indicated range between HK$2.03 and HK$2.90, and represents a price-to-earnings ratio of 15.5 times, based on 2010 projections.

The interest, which included a subscription ratio of 38 times for the retail tranche, was underpinned by very convincing presentations from the NVC executives during the roadshow, which helped minimise investor concerns, bankers involved in the deal said.

The company's strategy of switching to energy-saving lighting products, which is in line with the topical theme of new energy development, also helped attract interest, sources said.

The participation of Citic Securities as a cornerstone investor in the deal, with a commitment to buy $20 million worth of shares, is also said to have helped attract orders. The company signed up two other cornerstones: CCB International Asset Management which bought $10 million worth of shares, and Shine Profit Assets which invested $15 million.