Shein prices Hong Kong IPO below top end of range, raises $1.74 billion

By Nikita Maria Jino, Roshan Thomas and ‌Yantoultra Ngui

Aug 31 (Reuters) - Shein ​on Monday ​priced its Hong Kong initial public offering below the top end of its marketed range, raising HK$13.60 billion ($1.74 billion) from the share sale.

The online fast-fashion retailer offered 280 million shares for the listing at HK$48.56 ‌per share. Last week, it said it would offer shares between HK$47.60 and HK$49.50 apiece.

The Hong ⁠Kong public offering portion was subscribed 5.63 times, while the international portion was subscribed 2.59 times, Shein said in a stock exchange filing on Monday.

"Judging ‌by the subscription response, I believe ‌the oversubscription rate is relatively mild," said Kenny Ng, a strategist at China Everbright Securities International in Hong Kong.

"Some investors remain relatively cautious about its valuation" due to fluid international trade policies in recent years and the impact of ​geopolitical tensions on global consumer sentiment, Ng said.

The Singapore-based, Chinese-founded company's shares are slated to begin trading on the Hong Kong Stock Exchange on Tuesday.

Existing investors in Shein who participated in the offer include billionaire Michael Bloomberg's family office Willett ⁠Advisors, French billionaire entrepreneur and investor Xavier Niel, and Microsoft Corp, the filing showed on Monday.

Indian billionaire Mukesh Ambani's Reliance also bought more shares in Shein, according ​to the filing, as did Bolivian American billionaire Marcelo Claure's Claure Group, and the SoftBank Vision Fund.

Cornerstone investors were Boyu Capital, Tiger Global Management, General Atlantic, Tencent, Greenwoods Asset Management, Taikang ​Life Insurance, UBS Asset Management Singapore.

Reuters last week reported that the retailer's ‌Hong Kong IPO book had been fully covered by investor demand despite growing business and regulatory challenges.

Shares of the fast-fashion retailer dropped more than 10% in gray-market trading on Monday. Hong Kong ⁠Exchanges and Clearing said on Friday it would launch options and allow short selling of Shein shares from their trading debut.

Shein has said it would use most of the proceeds from the offering to improve its technology and boost brand awareness and global presence.

REGULATORY ISSUES CLOUD ⁠DEBUT

The long-awaited market debut comes after the online retailer, known for selling cheap clothing to shoppers in about 160 countries, scrapped plans to list ​in New York and London.

Shein has been working to address environmental, social and governance concerns that have triggered regulatory investigations and fines in several countries, complicating previous efforts to take the company public.

The company is currently under investigation by the European Commission and the U.S. Federal ‌Trade Commission. It has said it is actively cooperating with both.

Previous probes resulted in fines in France over alleged fake discounts and in Italy over greenwashing, as fast-fashion retailers come under increased ‌scrutiny from regulators.

Shein said in late July it swung to a quarterly loss of $99 million after the United States removed an import duty ⁠exemption for small packages and after it recorded ‌a $328 million fair-value charge on convertible redeemable ​preferred shares following an accounting change.

($1 = 7.8379 Hong Kong dollars)

(Reporting by Nikita Maria Jino and Roshan Thomas in Bengaluru and Yantoultra Ngui in Hong Kong; Editing by Sherry Jacob-Phillips, Diti Pujara, Devika Syamnath ‌and Tomasz Janowski)

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