China Railway Signal & Communication Corp (CRSCC), the world's largest maker of rail traffic control systems, plans to raise up to $1.8 billion in a Hong Kong listing as it seeks funds to boost acquisitions, research and production.

The company will offer 1.75 billion new shares, or about 20 percent of the enlarged share capital, in an indicative range of HK$6.30 (81 cents) to HK$8.00 each, Reuters reported last week, citing people familiar with the plans.

The deal, set to be priced this Friday, will be Hong Kong stock market's second-largest IPO this year after the $2 billion listing of Lenovo Group's parent Legend Holdings Corp in June.

It comes on the back of a renewed Chinese government push to bolster rail and other infrastructure investments.

Capital market activity in Hong Kong has soared in recent months, led by share sales from companies already listed in Shanghai and Shenzhen, including brokerages Huatai Securities Co and GF Securities Co.

An official at CRSCC's public relations department declined to comment on the IPO plans.

CRSCC, which supplies equipment and services to more than 20 countries and regions, posted net profit of 2.04 billion yuan ($329 million) in 2014 on revenue of 17.3 billion yuan, up from a profit of 1.2 billion yuan and revenue of 13.1 billion yuan a year earlier.

The IPO's price range represents a forward price-to-earnings ratio of 19 to 24 times.

China is looking to pump more cash into infrastructure to encourage economic development.

The country invested more than 265.1 billion yuan in domestic railway construction in the first half of the year, putting an additional 2,226 kilometers of new lines into service.

The planned infrastructure spending, along with a wider government-led push to export high-speed rail technology, has driven investors to snap up shares in the country's railway firms, the biggest of which are State-owned.

Hong Kong-listed shares in CRRC Corp, formed through a merger of China's two largest rolling stock producers, have risen by almost 50 percent over the past year.

Railway builders China Railway Construction Corp and China Railway Group have seen their shares jump 51 percent and 71 percent, respectively, over the same period.