China Resources Pharmaceutical Group Ltd. has raised $1.8 billion in one of the biggest Hong Kong initial public offerings of the year.

The company, controlled by a Chinese state-owned conglomerate, priced its IPO on Friday at 9.10 Hong Kong dollars (US$1.17) a share, according to people familiar with the matter. The pricing was toward the lower end of an indicative range of HK$8.45 to HK$10.15 a share.

A group of 10 cornerstone investors—who buy big chunks of shares and hold them for at least six months after the listing—took nearly half of the offering even before the pricing was fixed.

Those investors include U.K. consumer-goods company Reckitt Benckiser Group PLC; Japanese camera and medical-equipment maker Fujifilm Holdings Corp.; Swedish asset manager Nordea Investment Management AB; and Chinese insurers China Life Insurance Co. and Anbang Insurance Group Co.

China Resources Pharma plans to use around 45% of proceeds from the offering to make acquisitions in China and expand its pharmaceutical manufacturing and distribution businesses, according to its IPO prospectus. The remainder will be used to set up more logistics centers and warehouses, investing in research, upgrading its technology systems, and repaying debt, it said.

The stock will begin trading in Hong Kong on Oct. 28.

Bank of America Merrill Lynch, CCB International (Holdings) Ltd., China International Capital Corp., and Goldman Sachs Group Inc. are handling the offering.

Write to Kane Wu at Kane.Wu@wsj.com and Alec Macfarlane at Alec.Macfarlane@wsj.com

(END) Dow Jones Newswires

October 21, 2016 01:35 ET (05:35 GMT)