Nongfu Spring, which makes 60 per cent in profit for every bottle of water it sells, has become the hottest initial public offering (IPO) in Hong Kong's financial history, locking up so much money that it sent the cost of funds soaring in the city.To get more news about Nongfu Spring, you can visit en.nongfuspring official website.

The company, based in the Zhejiang provincial capital of Hangzhou, offered 388.2 million shares at HK$21.50 each in Hong Kong, aiming to use its IPO proceeds of HK$8.35 billion to fund its growth. Instead, Nongfu's retail shares were overbought by a record 1,147 times, locking up HK$677 billion (US$87 billion) in capital, according to a filing to the Hong Kong stock exchange.

The overwhelming response to Nongfu's IPO, hot on the heels of a bumper month in July when 24 companies sold shares in the city to raise funds, is a clear sign of how Hong Kong's capital market is roaring ahead in defiance of a debilitating recession, a stubborn coronavirus outbreak and political malaise. Over the weekend, police arrested close to 300 people as anti-government protests resumed, but the political tensions as well as questions about Hong Kong's position under China's national security law failed to douse investors' enthusiasm in the Chinese company's offering.

"There's plenty liquidity in the city right now, and the entire market's focus is the IPO sector," said Kenny Wen, wealth management strategist at brokerage Everbright Sun Hung Kai in Hong Kong. "Technology stocks in the secondary market have become very expensive, so investors have turned to look for opportunities in the new shares."

Nongfu's IPO broke the 2008 record set by China Railway Construction Corporation, when its HK$20.2 billion stock offer received HK$541 billion in bids. The bottler's shares will debut on the Hong Kong stock exchange on September 8, and the proceeds from unsuccessful bids will be returned to investors' accounts.

Nongfu had initially set aside 27 million shares, or 7 per cent of its IPO offering, for retail investors. It received 707,532 retail applications for 31 billion shares, prompting the company to shift 77.6 million shares reserved for institutional investors to the retail tranche. The chances of retail investors getting allocations ranged from 0.14 per cent to 12 per cent, according to the company's filing.

Investors had to deposit their money for 10 days a much longer lock-up period compared with other IPOs to apply for their allotment. The amount of cash locked up was equivalent to a third of the total capital in circulation everyday in Hong Kong, according to data by the city's monetary authority.

The unprecedented amount of cash investors had to freeze to participate in the new share lottery pushed up interest rates in Hong Kong. The one-month Hong Kong interbank offered rate (Hibor) jumped to 0.45 on September 1, its highest level in two months, from 0.26 on August 25, when the offering started.Nongfu's IPO proceeds will go towards brand building, purchasing equipment, increasing production capacity as well as repaying bank loans.