By Gina Lee

Investing.com – Hangzhou-based Nongfu Spring (HK:9633) made a memorable debut on the Hong Kong Stock Exchange (HKSE), with shares surging as much as 85% in the city’s largest IPO this year.

The shares opened at HK$39.89 ($5.14) per share on Tuesday, before settling at HK$33.30 as of 13:09 AM ET (6:09 AM GMT).

Nongfu offered 388.2 million shares at HK$21.50 each and will use the HK$8.35 billion ($1.08 billion) in proceeds raised to fund company growth. A HKSE filing showed that retail shares were overbought by a record 1,147 times, raking in HK$677 billion (US$87 billion) for the company. Cornerstone investors included Fidelity, Coatue and Singapore’s GIC.

Nongfu Spring was “one of the hottest IPO ever” in the history of Hong Kong’s stock market, Kingston Securities executive director Dickie Wong told CNBC.

Investors are interested in the stock not only for its “fundamentals or its very high profit margin”. But there is a general lack of investment opportunity, given that valuations of stocks such as technology or internet companies remain high. “So, investors think (participating) in a new IPO is always the best strategy,” he added.

The company sells packaged drinks including coffee, tea and fruit juices, in addition to its signature product of bottled water. The company took the largest share in China’s packaged drinking water market from 2012 to 2019, according to a Frost and Sullivan report.

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