HONG KONG (Reuters) – Alibaba Health Information Technology has raised nearly $1.3 billion in Hong Kong’s largest follow-on share sale since 2015, and industry experts say this could prompt more firms to tap investors for cash in the Asian financial hub.

The Chinese company, an arm of internet retail giant Alibaba Group, said on Wednesday it would issue 499 million new shares priced at HK$20.05 ($2.59) apiece, an 8% discount to the stock’s HK$21.80 closing price in Hong Kong on Tuesday.

Alibaba Health shares were down 2.75% at HK$21.20 in the first session since the deal was finalised.

The size of the deal was increased by 25% during the institutional bookbuild overnight on high demand from investors. This is the largest ever healthcare follow-on in Hong Kong.

The transaction, according to experts, could trigger more capital raisings in Hong Kong as companies take advantage of positive sentiment towards healthcare stocks amid the coronavirus pandemic.

“Follow-on deals can be done very quickly, it comes down to sentiment and price,” said a capital markets lawyer, who could not be named because he was not authorised to speak to media.

“Companies in healthcare and biotech are doing very well, I think we will see more deals like this happening in Hong Kong.”

The deal was the largest Hong Kong follow-on share sale since CSPC Pharmaceutical Group’s $1.26 billion transaction in 2015, Refinitiv data showed.

Ahead of the Alibaba Health deal, Hong Kong’s equity capital markets volumes for 2020 stood at $42.7 billion versus $22.3 billion at the same time last year, Dealogic data shows.

Alibaba Health said the cash would be used to develop its pharmaceutical e-commerce business, which has benefited from the growth of the online service sector amid the health crisis.

($1 = 7.7503 Hong Kong dollars)