Qualcomm could participate in Xiaomi IPO and pick up stake in the company

It's unclear just how much of a stake Qualcomm will manage to buy in Xiaomi, though.

  • Published: June 22, 2018 10:23 AM IST

xiaomi HQ

Xiaomi is set to go public with its ownership, and will have an initial public offering in Hong Kong to raise capital next month. A new report from Bloomberg now suggests that American chipset maker Qualcomm is among a handful of cornerstone investors looking to pick up a stake in Xiaomi through its IPO, which is expected to raise $6.1 billion.

Post the IPO, Xiaomi’s total valuation could go up to $70 billion, with less than a 10 percent stake in the company being offered through the offering. Qualcomm, along with six other cornerstone investors, will be picking up about 10 percent of the total stake being offered, suggesting that Qualcomm’s stake in Xiaomi will be a fraction of a percentage post the investment. The cornerstone investors, which include SF Express and China Mobile, are expected to spend a combined total of $548 million on their stake.

After the Hong Kong IPO, a second IPO in mainland China could also follow. Qualcomm’s investment in Xiaomi likely has to do with its efforts to build a better relationship with the Chinese establishment in general. Xiaomi, after Huawei and ZTE, is the next big technology company to look out for from China.

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However, while Huawei and ZTE have much more presence in equipment and technology development, Xiaomi sticks to consumer products. Nonetheless, Xiaomi is among the world’s biggest smartphone makers by shipments, and Qualcomm’s investment could help it work more closely with the company expected to become the leading smartphone maker in the coming years. Xiaomi is known to work closely with Qualcomm on product development, using the American company’s chipsets in most of its smartphones.

  • Published Date: June 22, 2018 10:23 AM IST