By Joanne Chiu

JD Logistics Inc. is raising $3.17 billion from an initial public offering in Hong Kong as it plans to price the deal at the lower half of an indicative range, according to people familiar with the situation.

The logistics arm of JD.com Inc. has guided investors that it plans to set the offer price at 40.36 Hong Kong dollars (US$5.20).

The pricing means the company is valued at $31.7 billion ahead of a listing on the Hong Kong stock exchange on May 28.

JD Logistics initially offered about 609.16 million new shares at an indicative range of HK$39.36 to HK$43.36 each.

The offering size could increase by up to 15% to $3.6 billion if a "green-shoe" option is exercised. The deal is being handled by units of Bank of America Corp., Goldman Sachs Group Inc. and Haitong Securities Co.

JD Logistics' IPO follows share sales in the city by JD.com and another of its subsidiaries last year, which in total raised nearly $8.5 billion, according to Dealogic. The company competes with businesses such as Shenzhen-listed S.F. Holding Co., ZTO Express Cayman Inc. and Alibaba's logistics arm, Cainiao Network Technology Co.

Write to Joanne Chiu at joanne.chiu@wsj.com

(END) Dow Jones Newswires

05-20-21 2352ET