(Yicai Global) Nov. 5 -- China Mobile has secured permission to go public on Shanghai’s Nasdaq-style Star Market. The world’s biggest telecoms carrier by subscribers plans to raise CNY56 billion (USD8.7 billion).

The China Securities Regulatory Commission announced the approval via its website yesterday.

China Mobile plans to issue up to 965 million so-called A-shares, those traded in the Chinese mainland, or no more than 4.5 percent of the total outstanding. The Beijing-based firm may authorize the lead underwriters to exercise an over-allotment option for no more than 15 percent of the total issued shares, according to the prospectus.

The company will invest around half of the proceeds on its fifth-generation network. The remainder will go on new infrastructure for cloud resources, gigabit smart families, smart middle ground, new-generation information technology research and development, digital intelligence ecology, and other areas.

This year is not a good time to go public, especially for large-cap stocks like China Mobile and China Telecom, according to sector analyst Fu Liang. But any decline below the offer price only impacts shares’ transaction prices, not the fundraising proceeds, he noted.

China Telecom went public on the Shanghai Stock Exchange on Aug. 20, banking CNY47 billion. But the shares fell below the offer price after only a month. Many other stocks have dropped below their initial pricing on their first trading day.

China Mobile’s purpose is not to raise money via the public offering since it has deep pockets. Rather the firm intends to share its development results with users, Fu said.

A mainland secondary listing can help push forward China Mobile's transformation and development, Chairman Yang Jie said.

China Mobile's Hong Kong-listed shares [HKG:0941] closed up 0.5 percent at HKD48.70 (USD6.26) today.

Editors: Xu Wei, Futura Costaglione