Alibaba.com Ltd, operator of the mainland's largest trading website for companies, and its parent may raise as much as HK$10.3 billion in a Hong Kong initial public offering that attracted investors including Yahoo! Inc.

Alibaba.com Ltd and Alibaba.com Corp, both based in Hangzhou, eastern China, will sell a combined 858.9 million shares at HK$10 to HK$12 apiece, according to a document distributed to international institutions yesterday.

The IPO in Hong Kong, where the benchmark Hang Seng Index has surged 48 percent this year, is the largest of a mainland Internet company.

The IPO may lure other Internet companies on the mainland to sell stock in Hong Kong. At the top end of the range, Alibaba's valuation would be almost double that of its closest rival Global Sources Ltd.

"The IPO will become a landmark for mainland Internet and e-commerce development," said Wang Lei, a co-manager of Thornburg International Value Fund in Santa Fe, New Mexico, which oversees $16 billion. "The transaction volumes among small and mid-sized companies will be phenomenal on the mainland, which would become the sustainable revenue foundation for Alibaba."

Yahoo, which owns 39 percent of Alibaba.com Corp, will buy HK$776 million of the IPO shares. It will directly own 8.2 percent of Alibaba.com Ltd after the sale, said the document.

The sale of a 17 percent stake values Alibaba.com Ltd at as much as $7.8 billion. Deutsche Bank AG, Goldman Sachs Group Inc and Morgan Stanley are arranging the sale. Trading in Alibaba.com Ltd is scheduled to start on November 6.

An additional HK$1.1 billion worth of IPO shares is reserved for five other corporate investors including a unit of American International Group Inc and the Industrial and Commercial Bank of China (Asia) Ltd, sources said.

The IPO values Alibaba.com at as much as 48 times what the underwriting banks estimate the company will earn next year before stock-based compensation, sources said. The price-earnings ratio rises to as high as 59 after such expenses are deducted, they said.