July 6 (Bloomberg) -- Fosun International Ltd., the Chinese company with businesses ranging from pharmaceuticals to steel, raised HK$11.54 billion ($1.5 billion) in an initial public offering after individual investors ordered more than 200 times the stock on offer, people with knowledge of the matter said.

The company sold 1.25 billion shares at HK$9.23 apiece, the maximum it sought, said the two people, who declined to be identified as the information isn't public. Saudi Prince Alwaleed bin Talal and former American International Group Inc. Chief Executive Officer Maurice ``Hank'' Greenberg bought shares.

The IPO gives Fosun, founded 15 years ago by Guo Guangchang and three partners with $4,000, a market value of $7.4 billion. Hong Kong tycoon Li Ka-shing also invested in the Shanghai-based company, which has been compared to Li's Hutchison Whampoa Ltd. because of its patchwork of businesses in different industries.

``The Hutchison description is very evocative to local investors as Li Ka-shing can do no wrong in their eyes,'' said Andrew Clarke, a sales trader at SG Securities Hong Kong Ltd.

Li, who swept factory floors as a youth, parlayed a plastic-flower making business into a multibillion-dollar empire spanning ports, telecoms and property development that made him Asia's richest man. Hutchison, Li's biggest company, has a market value of $43.8 billion.

Greenberg, Alwaleed

China International Capital Corp., Morgan Stanley and UBS AG arranged the sale, the third-largest Hong Kong IPO this year, according to data compiled by Bloomberg.

Hong Kong individuals demanded more than 230 times the 125 million shares previously earmarked for them, the people said. Shares allocated to them will be expanded to 50 percent of the offering, from 10 percent.

International institutions ordered more than 170 times the remaining shares available to them, the highest multiple among Hong Kong initial public offerings this year, the people said.

In all, 11 corporate investors, excluding Alwaleed, were guaranteed $220 million of shares between them, according to Fosun's share sale document.

Mark Panday, a UBS spokesman in Hong Kong, declined to comment, as did Nick Footitt, a Morgan Stanley spokesman, also in Hong Kong, and Tracy Hu, a Beijing-based CICC spokeswoman. Fosun officials in Shanghai couldn't immediately be reached.

China's Largest

Fosun began with pharmaceutical investments, and now owns stakes in at least five Hong Kong or Shanghai-listed companies including Shanghai Forte Land Co. and Shanghai Fosun Pharmaceutical Group Co.

The initial public offering values Fosun at more than 18 times estimated 2008 earnings. Hutchison Whampoa is trading at about 24.7 times its estimated 2008 earnings, according to Bloomberg data. Citic Pacific Ltd., a Chinese state-backed investment holding company listed in Hong Kong, is valued at 19.3 times 2008 earnings.

The first-time share sale values Guo's 46.4 percent stake in the company at about $3.4 billion, according to Bloomberg calculations. Wong Kwong-yu was ranked by Forbes as China's richest person last November, with an estimated wealth of $2.3 billion.

More Acquisitions

Fosun will use the money raised from the share sale to make further investments and acquisitions in steel, pharmaceuticals, retailing, raw-material suppliers such as providers of iron ore and coking coal and financial services, the share sale document said. The company has plans to raise its stake in Tebon Securities, a Chinese brokerage, and may buy stakes in small commercial banks, it said.

Much of Fosun's business is vulnerable to economic cycles, contributing to volatile earnings and putting the company at risk from the government's macro-economic tightening measures, according to June 15 UBS report obtained from a fund manager.

Fosun's sales rose 3 percent to 24.2 billon yuan ($3.2 billion) last year over the previous 12 months, according to its share sale document. Net income fell 19.6 percent to 1.1 billion yuan because of weak steel prices and a one-time tax provision related to its property arm.

Fosun derived 73 percent of its sales from steel last year, 10.5 percent from property development and 16.5 percent from drug-making. It forecast net income to nearly double to at least 2.15 billion yuan this year, the document said.

Demand from international institutions earlier prompted Fosun to revise up the initial public offering price range from HK$6.48 to HK$8.68 a share.

The stock is scheduled to start trading on July 16.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

Last Updated: July 6, 2007 03:27 EDT