Agricultural Bank of China, the country's No.3 bank by assets, has closed the books on its dual Hong Kong and Shanghai share sale and could break all IPO records by raising more than $22 billion.

AgBank , which is raising funds to replenish capital after the financial crisis and an industry-wide lending binge, will begin its pricing meeting at 1030 GMT, according to sources involved in the deal.

If AgBank's offering is priced toward the top of the indicated range, and a greenshoe option is exercised to expand the deal by 15 percent, the IPO will likely exceed Industrial & Commercial Bank of China's <1398.HK><601398.SS> record-breaking $21.9 billion offering in 2006.

It will also provide a guide for other Chinese banks planning tens of billions of dollars in similar capital raisings this year and a gauge on the risk appetite of investors hurt by plunging global markets and concerns over economic growth.

Investors have been on the sidelines waiting for the AgBank IPO, but I see volume picking up once again after the listing as the fundraising has already been discounted in the stock prices and pessimism about the global economy tempers, Mark To, Head of Research at Wing Fung Financial Group, said.

MID RANGE HK, TOP IN SHANGHAI EXPECTED

Two fund managers expected AgBank to price at HK$3.28, the middle of a new, narrower range that sources said the company had set on Monday.

That would value the company at 1.73 times 2010 prospective book value, higher than the 1.5 times book institutional investors told Reuters they were willing to pay in a poll last month.

The poll came before cornerstone investors took up a larger than expected $5.45 billion worth of the Hong Kong share offering, leaving fewer shares for the world's mutual funds.

Investor demand appeared robust on the mainland. A source with direct knowledge of the listing told Reuters on Tuesday that AgBank's Shanghai offering was about 20 times oversubscribed by institutional investors.

One of the fund managers said the bank would price its Shanghai IPO at the top end of the range at 2.68 yuan, a safe bet if history is any guide.

The only major China IPO since last June to miss the top of its price range was China First Heavy Industries <601106.SS>.

An official announcement on AgBank's pricing is expected on Wednesday, but details are likely to leak out Tuesday night or early Wednesday morning.

A top-of-range pricing plus the overallotment would value AgBank at around $150 billion, ranking it the fourth biggest bank in the world by market capitalization behind ICBC, China Construction Bank <0939.HK><601939.SS> and HSBC .

LAST OF BIG FOUR

Headed by Chairman Xiang Junbo, an award-winning scriptwriter and war hero, AgBank has 24,000 branches, 441,000 employees and 320 million customers -- more than the population of the United States.

AgBank is going public because it has finally been able to shed its massive non-performing loan book, which only a few years ago was around 25 percent. The sale of the 15 percent stake will complete Beijing's plans to have its four major banks go public.

AgBank's pricing will also provide a barometer of sentiment for other Chinese banks planning capital raisings; Bank of China <3988.HK><601988.SS> and ICBC also have huge fund raisings planned.

Its July 15 and 16 debut will also track risk appetite.

China's benchmark stock index <.SSEC> has fallen nearly a quarter since mid-April and fell sharply last week, partly as investors sold stocks to raise money for the AgBank offer.

However, Shanghai and Hong Kong stock markets rose on Tuesday on hopes that money will move back into the oversold market after AgBank's IPO is completed, boding well for the performance of the bank's shares after their debut. <.SS> <.HK>

Founded in 1951 by Mao Zedong as the rural unit of the central bank, it aims to list its shares in Shanghai on July 15, and in Hong Kong the following day.

Roughly half of both the Shanghai and Hong Kong offerings have already been subscribed to by major cornerstone and strategic investors, including sovereign wealth funds, banks, insurers and other major companies. Retail demand for both IPOs has so far shown a tepid response.

The (AgBank) pricing would be a barometer of market demand for Chinese banking stocks, said Paul Lee, Hong Kong-based analyst at Tai Fook Securities. I don't see much good news about Chinese banks in the short term, he said, citing concerns over the share sales and worries about loans to local governments that could struggle to repay them.

(Additional reporting by Michael Wei in Beijing; David Lin and Farah Master in Shanghai and Fiona Lau in Hong Kong; Writing by Michael Flaherty; Editing by Lincoln Feast and Will Waterman)

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