Xiaomi has raised HKD42.5 billion (USD5.5 billion) after the Chinese electronics giant sold 800 million shares at a discounted price.

The proceeds will be used for business expansion, research and development, and other general corporate purposes, the Beijing-based company announced yesterday. The placement conditions were completed on March 27, it noted.

The 800 million shares were sold at HKD53.25 (USD6.84) apiece to at least six investors, representing 3.1 percent of its total share capital, Xiaomi said. That was a 6.6 percent discount on the closing price of HKD57 on March 24, the day before the placement was announced.

Shares of Xiaomi [HKG: 1810] climbed 0.3 percent to HKD49.35 each as of lunch break in Hong Kong today.

A softer share price following a stock offering is not uncommon, as the additional shares issued dilute existing shareholder equity, often leading to a perceived loss of value in their holdings and triggering a near-term sell-off.

Following the placement, the stake of Xiaomi founder and Chairman Lei Jun dropped to 23.4 percent from 24.1 percent, though he remains the company's largest shareholder.

Xiaomi's research and development expenditure surged 26 percent to CNY24.1 billion (USD3.3 billion) last year from the previous one, according to its annual financial report.

The R&D investment of Xiaomi will likely exceed CNY100 billion (USD13.8 billion) over five years starting in 2021, President Lu Weibing said at an earnings conference call. The figure will top CNY30 billion this year, with one-fourth to go for artificial intelligence-related R&D, Lu pointed out.

Xiaomi's cash and cash equivalents reached around CNY33.7 billion as of the end of last year, according to the company.