PICC plans dual IPOs

The potentially largest initial public offering on the Hong Kong stock market this year is likely to debut in the middle of July and may raise at least $3 billion, a source close to the deal said.

Hong Kong Exchanges and Clearing Ltd will hold a meeting on June 21 to discuss the IPO application of the People's Insurance Company of China, one of the country's largest State-owned insurers, according to the source.

Goldman Sachs, Morgan Stanley, UBS and 11 other banks were mandated to help underwrite the Hong Kong tranche of the IPO, valued at up to $3 billion, said IFR, a Thomson Reuters publication.

PICC also plans to go public on the Chinese mainland's A-share market, which could be the largest IPO in the Asia-Pacific region in 2012. The company wants to boost its balance sheets and meet regulatory requirements over capital adequacy ratios.

China International Capital Corporation Ltd and Essence Securities Co Ltd won the bid to become the main underwriters of the mainland IPO. The issuing may start as soon as October, the anonymous source said.

Currently, there are four Chinese insurance companies listed on the Hong Kong stock market, with an average price-book value ratio of 2.38, among which the highest is 2.8 for the Ping An Insurance (Group) Company of China Ltd.

If the issue price of the PICC IPO reaches 4.5 yuan, the price-book value ratio is expected to be 3, analysts said.