BEIJING - The online news portal of the official Communist Party of China newspaper People's Daily plans to raise about 527 million yuan ($83.52 million) through an initial public offering (IPO) on the Shanghai Stock Exchange.

People.cn Co, which competes with commercially operated rivals, such as Sina Corp and Sohu, aims to raise cash by selling 69.1 million new shares, or 25 percent of its enlarged capital base, to fund expansion, according to a preliminary prospectus posted on the website of China's securities regulator.

The China Securities Regulatory Commission will vet People.cn's IPO application on Friday.

Beijing is encouraging IPOs by State-owned news websites.

China's State news agency Xinhua also plans to list its online portal in Shanghai to raise about 1 billion yuan, media reports said earlier.

People.cn faces "big challenges" from commercial websites, such as Sina and Sohu, which have benefited from the opening of the Internet services industry as well as ample funding, according to the prospectus.

People.cn, which is controlled by People's Daily and counts State-owned telecommunications giants, including China Mobile, China Unicom and China Telecom, among its shareholders, plans to use the IPO proceeds to upgrade technology, develop mobile services and strengthen its editorial team.

Its net profit almost quadrupled to 81.6 million yuan in 2010 from a year earlier, with online advertising contributing to about half of the company's revenue.

CITIC Securities Co is underwriting the IPO.