Xiaomi Stock dropped below HK$50, down over 3% to HK$49.6 with a market cap of HK$1.26 trillion.

Xiaomi said on Tuesday it had raised $5.5 billion in an upsized share sale as the company pushes forward with its ambitious electric vehicle manufacturing plans.

The company sold 800 million shares at HK$53.25 each, it said in a statement to the Hong Kong Stock Exchange. The world's third-largest smartphone maker has seen its share price surge by nearly 150% from HK$21.5 in the past six months, buoyed by investor enthusiasm for its EV plans.

Xiaomi, which moved into electric vehicle manufacturing last year, had planned to sell 750 million shares but increased the size of the deal while the bookbuilding process was underway.

There were more than 200 investors who placed orders during the bookbuilding process and the book was multiple times oversubscribed, said a person familiar with the matter.

The top 20 investors took about 66% of the stock sold in the share sale, the person added.

Xiaomi began manufacturing EVs last year with the launch of the SU7 sedan after selling smartphones, household appliances and smart gadgets for most of its 15-year history.

It reported an almost 50% jump in fourth-quarter revenue last week and raised its target for electric vehicle deliveries this year to 350,000 from 300,000.

The company reported 32.1 billion yuan ($4.4 billion) in revenue for its EV business in 2024, delivering more than 135,000 SU7 sedans. Xiaomi said it aimed to start shipping cars overseas in 2027.

The tech firm has purchased a new land plot of 52 hectares (128.5 acres) in Beijing's south, where it would build the third phase of its auto factory as it ramps up its annual shipment target, Chinese media has reported.

Xiaomi will invest a quarter, about 7-8 billion yuan, out of its 2025 total research and development budget of 30 billion yuan into AI, President Lu Weibing said last week.

Xiaomi's deal extends a rush of tech-focused capital raisings from Chinese firms in Hong Kong, as companies take advantage of positive sentiment towards the tech sector.