Xiaomi’s mega IPO may catapult Lei Jun among world’s 30 richest billionaires

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Published: May 9, 2018 1:12:27 PM

Chinese smartphone maker Xiaomi's mega is likely to catapult founder Lei Jun among top 30 billionaires, making him the fourth richest in China just behind Alibaba's Jack Ma.

Xiaomi has filed for a debut in Hong Kong exchange that values the company company between $50 billion to $100 billion.

Touted as the biggest IPO since 2014 after Alibaba, Chinese smartphone maker Xiaomi IPO to raise up to $10 billion is likely to catapult founder Lei Jun to top 30 billionaires, after Alibaba’s Jack Ma. Notably, Xiaomi has filed for a debut in Hong Kong exchange that values the company company between $50 billion to $100 billion, according to six analysts surveyed by Bloomberg.

Interestingly, Lei, the chairman and chief executive officer, who holds a 31.4 percent stake, could see his overall net worth swelling to $28.3 billion, including investments in Kingsoft and YY Inc making him China’s fourth-richest person after Alibaba’s Jack Ma, Pony Ma of Tencent Holdings Ltd, and Hui Ka Yan, chairman of China Evergrande Group, according to a Bloomberg report.

“A $50 billion valuation with a 25 percent public float comprising only newly-issued shares would value Lei’s stake at $11.8 billion, while a $100 billion market cap with a 15 percent float would boost his stake value to $26.7 billion,” Bloomberg reported. However, any stake sale by Lei Jun could impact Xiaomi valuation.

While the IPO will certainly bring windfall gains to Lei Jun, it will a $100 billion valuation for the company could create five new billionaires. Currently, among the world’s 500 richest people, there are 40 Chinese — the second most after the U.S. — with a combined wealth of $464 billion, according to the Bloomberg Billionaires Index.

Among the major gainers from the IPO is Manu Jain, India managing director and global vice-president, who holds 2.3 million shares. Notably, Manu Jain is the only foreigner among the 10 employees on board and senior management team  of Xiomi who has shares allotted under the employee stock ownership plan (ESOP) according to the company’s draft prospectus. He is also the third-highest ESOP holder globally.

Interestingly, Xiaomi was founded in 2010 d to create a smartphone brand selling handsets at “honest” prices. Within eight years, the company has grown to become the fourth largest smartphone maker in the world, behind Samsung, Apple and Huawei. Xiaomi’s revenue in 2017 grew over 67 percent on-year to 114.6 billion yuan, even as the company reported a net loss of 43.9 billion yuan in 2017, down from the 491.6 million profit it made in 2016.

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