Postal Savings Bank of China raises $7.6bn in IPO

The biggest initial public offering (IPO) since 2014 has seen the Postal Savings Bank of China set a lower than expected price of $7.6bn, on the back of disappointing demand for the state-owned bank in the Hong Kong market.

Shares in the company are expected to begin trading next week, after reporting $25bn in sales and $5.2bn of profits last year.

The bank, China's largest by number of branches, originally sought to raise $8.1bn but investors had questioned whether the valuation was too high.

PSBC had tried to get a valuation of between 0.94 and 1.02 times its price-to-book ratio, which would have been far ahead of the 0.76 average for its Hong Kong-listed peers.

The IPO is the biggest in the world since Alibaba's huge $25bn offering in November 2014.

Beijing reportedly provided assistance for PSBC in its flotation, putting up 75% of the figure from its state-owned companies.

The high percentage of investors from the state would suggest demand was lukewarm or the IPO, with the so-called "cornerstone investors" receiving shares on a preferential basis, on the commitment that they do not sell within six months.