(Reuters) - Bayer’s Covestro rose as much 12.5 percent in its first day of trading on Tuesday in Germany’s largest initial public offering (IPO) in more than eight years.
The shares opened at 26 euros and rose to 26.99 euros by mid-morning, above the issue price of 24 euros ($27) apiece, and were trading at 26.81 euros at 0926 GMT.
The rise comes after Covestro was forced to scale down its IPO, seeking to raise 1.5 billion euros instead of 2.5 billion and slashing its price range from an initial 26.50-35.50 euros.
At the time, it cited choppy markets and the impact of the Volkswagen emissions scandal.
“The moment we revised the offer range downwards we had the market exactly where we wanted it,” Covestro finance chief Frank Lutz said, speaking from Deutsche Boerse’s trading floor after sounding the opening bell with Chief Executive Patrick Thomas.
He added that order books had been more than three times oversubscribed after the downward revisions.
Germany has seen a flurry of IPOs launched this autumn, but market volatility has scared off investors, who usually need to sell other equities before investing in new stock and are wary of divesting existing holdings at a loss.
Building materials maker Xella put its flotation on ice on Monday, and car parts maker Schaeffler scaled back its IPO.
Covestro’s Lutz said that the market debut could pave the way for other IPO candidates.
“Everyone has to win over investors under their own steam, that’s why we certainly aren’t the role model for others but it helps to show that large IPOs are possible again in Germany.”
Covestro ranks as the largest German flotation since marine-engines maker Tognum went public in 2007 in a 2 billion euro transaction. Including debt and pension liabilities, the price values Covestro at 8.9 billion euros, in line with rivals when measured by earnings multiples.
