The roadshow: what happens and who you meet

The roadshow is the stage most founders picture when they think of an IPO: investor meetings, an order book filling, a price fixed at the end. Underneath it sits a closely regulated process. The rules decide who sells your shares, how the offer is divided between institutions and the public, and who is permitted to buy. We set out that framework here so the meetings make sense when you are in them.

Two regulated activities

The Securities and Futures Commission (SFC) does not use the word roadshow. Its Code of Conduct defines two activities instead. "Bookbuilding activities" means collating investors' orders, including indications of interest, to facilitate the determination of the price and the allocation of shares, or the process of assessing demand and making allocations¹. "Placing activities" means marketing or distributing shares to investors pursuant to that bookbuilding¹.

Any licensed or registered firm performing these activities in Hong Kong, for an issuer, for investors or for both, is a "capital market intermediary"¹. Paragraph 21 of the Code applies to every one of them in an offering of shares listed or to be listed on the Stock Exchange of Hong Kong, and it sets the standards of conduct expected of them: addressing conflicts of interest, treating both the issuer client and investor clients fairly, and upholding the integrity of the market¹. The Code distinguishes a syndicate intermediary, engaged by the issuer, from a non-syndicate intermediary, which is not¹.

The overall coordinator

One role sits above the rest. In a share offering, an "Overall Coordinator" is a syndicate intermediary that, alone or jointly, does any of three things¹. The first is overall management of the offering: coordinating the bookbuilding and placing done by other intermediaries, controlling the bookbuilding, and making allocation recommendations to the issuer¹. The second is advising the issuer on the offer price and being a party to the price determination agreement¹. The third is exercising the discretion to reallocate shares between the placing tranche and the public subscription tranche, to reduce the number of offer shares, or to exercise an upsize or over-allotment option¹.

The Code defines the role by conduct, not by title. A firm carrying out any of those functions is an overall coordinator whether or not it has been formally appointed or has signed a written agreement with the issuer¹. It is a separate designation from the sponsor, though in practice the two often sit within the same banking group. Know which firm holds it before the roadshow begins.

How the offer is divided

Since 4 August 2025, the Exchange requires at least 40 percent of the shares initially on offer in every IPO to be allocated to the bookbuilding placing tranche². That is the institutional book your overall coordinator runs.

The public subscription tranche, the portion open to retail applicants, is sized under one of two mechanisms the issuer chooses². Under Mechanism A, 5 percent of the offer shares go to the public tranche initially, and a clawback raises that share according to how many times public demand covers the initial allocation²:

• demand of 15 times to under 50 times: 15 percent²
• demand of 50 times to under 100 times: 25 percent²
• demand of 100 times: 35 percent²

Under Mechanism B, the public tranche starts at a minimum of 10 percent and there is no clawback². The most that can go to the public under Mechanism B is 60 percent of the total offering, which follows from the 40 percent floor on the placing tranche².

Mechanism A keeps more of the book with institutions unless retail demand is very strong. Mechanism B gives retail a larger fixed share with no clawback uncertainty. Your overall coordinator will have a view. We suggest you form your own.

Cornerstone investors

A cornerstone investment in a Hong Kong IPO carries a six-month lock-up on the shares. The Exchange consulted on replacing this with a staggered release, found no consensus among respondents, and confirmed in August 2025 that the six-month requirement stays². Investors you approach for cornerstone commitments will price that holding period into their decision.

Who may and may not receive placed shares

The Exchange's Placing Guidelines bind every Exchange Participant through whom shares of a class new to listing are placed, whether by an overall coordinator, another syndicate member or a distributor³.

Without the prior written consent of the Exchange, no allocation may be made to a "connected client" of the overall coordinator, of any syndicate member or of any distributor³. The definition is wide: the firm's partners, its account executives, its substantial shareholders, its directors, the close associates of any of those, any member of the same corporate group, and certain family members and their companies whose accounts the firm manages on a discretionary basis³.

The same consent requirement applies to allocations to directors or existing shareholders of the applicant, or their close associates, in their own names or through nominees, unless the conditions in Listing Rules 10.03 and 10.04 are met, and to nominee companies unless the ultimate beneficiary is disclosed³. Not more than 10 percent of the total placing may go to employees or past employees of the applicant³. Under normal circumstances no overall coordinator, syndicate member or distributor may keep placed shares for its own account or its group's, unless the offer is not fully subscribed and the underwriters must take up the shortfall, or in exceptional circumstances the Exchange considers case by case³.

The shares placed must have an adequate spread of holders, and the Exchange may reject a listing application if the issuer cannot demonstrate one³.

What the coordinator owes the Exchange

The overall coordinator must make adequate distribution facilities available, must run the application list, and must determine a fair basis for allocation when the issue is oversubscribed³. In a placing involving bookbuilding, each overall coordinator is deemed to have reviewed the analysis the FINI platform generates on the distribution and concentration of the placed shares, and to have confirmed its accuracy by submitting Marketing and Independence Statements in Form D on FINI³. Those statements are due from every syndicate member and distributor before dealings begin³. Dealings cannot start until the Exchange has received and approved a list of all placees, with their names, addresses, identity or company registration details and the amount each took up³.

Two points bear on you directly. The issuer should document the rationale for its allocation and pricing decisions, in particular where the decision goes against the advice of the overall coordinator³. And the overall coordinator must inform the Exchange if the issuer's decisions amount to non-compliance with the Listing Rules on placing³. The book is yours to allocate, within the rules, but the reasoning will be on file.

Before the roadshow begins

These decisions are made before the first investor meeting, not after. The next step is a working session with your sponsor and the firm that will act as overall coordinator. Ask them to set out in writing which allocation mechanism they recommend and why, to confirm which firm will hold the coordinator role and sign the price determination agreement, and to take your board and existing shareholders through the connected-client and shareholder-allocation restrictions before anyone approaches an investor. Put that paper in front of your board before you sign the underwriting mandate.

Next in this stage: Sponsors, underwriters and advisers: who does what

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