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* Shares rise as high as HK$28.70 vs HK$20.60 IPO price
* IPO raised $511 million, largest in Hong Kong in 2017 (Adds details on IPO demand, comments, updates share movement)
By Elzio Barreto
HONG KONG, June 13 (Reuters) - Shares in WuXi Biologics (Cayman) Inc rose as much as 39 percent in their trading debut in Hong Kong on Tuesday, as investors that could not buy into the initial public offering jostled for a piece of the fast-growing business.
The stellar performance for the Chinese contract drug research and development company comes after its IPO, Hong Kong's largest new listing so far in 2017, raised $511 million, pricing at the top of its marketed range.
The stock rose to as high as HK$28.70, compared to its HK$20.60 IPO price on its first day of trade. The benchmark Hang Seng index firmed 0.3 percent.
Demand from retail investors - who can have a significant impact on first-day trading in Hong Kong share offerings - accounted for 37.5 times the number of shares on offer in the deal, WuXi Biologics said in a filing on Monday.
The institutional tranche was "very significantly" oversubscribed, it added.
Typically, companies going public set aside 10 percent of the shares on offer for retail investors, with the remainder going to institutional buyers, but that volume goes up depending on the level of oversubscription.
In the case of WuXi Biologics, underwriters ended up allocating 30 percent of the IPO to mom and pop investors, meaning fewer shares were available for professional buyers.
The supply of shares to institutional investors was further reduced as WuXi Biologics sold 7 percent of the shares on offer to four so-called crossover investors, or existing shareholders that wanted to add to their holdings - Fubon Life Insurance Co Ltd, which is a unit of Taiwan's Fubon Financial Holding Co Ltd , Taikang Insurance Group Inc (IPO-TKLI.HK) and venture capital firms Hillhouse Capital Management Ltd and Qiming Investments Ltd.
"This IPO has been in high demand," said a person with direct knowledge of the WuXi Biologics deal, who was not authorized to discuss the IPO publicly.
"For the Hong Kong market, there is very limited supply of these kind of high-tech bio companies getting listed. As a result, fund managers are keen to subscribe to this IPO, with high potential on profit growth and good concept."
WuXi Biologics' revenue jumped 77 percent in 2016, while profits more than tripled last year as it expanded the business and launched new projects, according to the IPO prospectus.
The company plans to use about 45 percent of its proceeds from the IPO to pay all its outstanding loans and debt and another 45 percent to expand its facilities in Shanghai and in nearby Wuxi in Eastern China.
The remaining 10 percent will be used for working capital. (Reporting by Elzio Barreto, additional reporting by Julie Zhu, Donny Kwok and Sumeet Chatterjee; Editing by Edwina Gibbs and Himani Sarkar)